2017 Annual Results Presentation. March 2018

Transcription

1 2017 Annual Results Presentation March

2 Contents 1 Results Highlights 3 2 Financial Overview 6 3 Business Operations 12 4 Strategic Layout 22 5 Appendix 31 6 Investor Relations

3 1. Results Highlights 3 3

4 2017 Annual Results Highlights Robust and sustainable contracted sales growth Contracted sales in 2017 increased by 78% yoy to approx. RMB45.59bn (attributable: 85%), and achieved 137% of its RMB33.3bn full-year target. CAGR from 2012 to 2017 was 54% Contracted sales in Dec 2017 surged by 230% yoy to approx. RMB11.20bn, setting historical high for single-month sales Contracted sales in the first two months of 2018 maintained a strong growth momentum and surged by 113% yoy to approx. RMB8.11bn Improving profitability and stable dividend policy Revenue in 2017 increased by 62% yoy to approx. RMB19.12bn Gross profit in 2017 increased by 56% to approx. RMB5.11bn; Gross profit margin was 26.7% Net profit in 2017 increased by 94% yoy to approx. RMB1.95bn; Core net profit increased by 55% yoy to RMB1.89bn Recommend a final dividend of RMB25.0 cents per share, representing a 40% dividend payout ratio for the year, and maintaining a stable dividend policy Healthy financial profile with upgraded credit ratings The only PRC developer with credit rating upgrades from all 3 major international rating agencies since 2016, namely Fitch BB-, Moody s B1 and S&P B+ ; Domestic credit rating was upgraded to AA+ by United Credit Ratings As of 31 Dec 2017, net gearing ratio was 51.0% at reasonable industry level, and total borrowing cost further decreased to 7.2%. Debt structure continued to improve Cash collection ratio was 80%, staying at a high industry level; Liquidity remained ample with total cash of approx. RMB26.54bn 4 4

5 2017 Annual Results Highlights (cont.) Proactive land bank replenishment Acquired a total of 58 new projects with newly added GFA of approx mn sqm (81% through M&A) and newly added saleable resources of approx. RMB166.9bn. The average land cost was approx. RMB2,446 per sqm As of 31 Dec 2017, total GFA of its land bank was approx mn sqm (attributable: 80%) with saleable resources of approx. RMB282.3bn, sufficient to support the higher sales target in the coming two years Key beneficiary of Big Bay Area with a full coverage Based in Guangdong with a full coverage in 9+2 cities, Aoyuan seizes the first-mover advantages and leverage the rapid growth trend in Big Bay Area Contracted sales from Big Bay Area amounted to approx. RMB24.28bn, accounting for 53% of total contracted sales in 2017 Total GFA of its land bank in Big Bay Area amounted to approx. 7.53mn sqm with total saleable resources of approx. RMB98.0bn Land bank supports from redevelopment projects 13 redevelopment projects are located in Big Bay Area with site area of approx. 1.36mn sqm and planned total GFA of approx. 5.55mn sqm. 2 to 3 projects are expected to be included into land bank in 2018 In addition, 3 redevelopment projects are located in Nanning City, Guangxi Province and Bazhou City, Hebei Province with site area of approx. 1.21mn sqm and planned total GFA of approx. 4.98mn sqm, further diversifying land acquisition channels 5 5

6 2. Financial Overview 6 6

7 Income statement highlights (Year ended 31 Dec) (RMB '000) Change Turnover 19,115,255 11,827, % Gross profit 5,111,477 3,277, % Gross profit margin 26.7% 27.7% -1.0p.p. Net profit 1,951,952 1,006, % Net profit margin 10.2% 8.5% +1.7p.p. Core net profit (1) 1,889,067 1,223, % Core net profit margin 9.9% 10.3% -0.4p.p. Total dividend per share (RMB cents) Final dividend per share (RMB cents) Special dividend per share (RMB cents) % Note (1): Excluding non-recurring profit and loss items and their related tax expenses, comprising fair value gain on investment properties, net exchange gain and loss on early redemptions of senior notes, etc. 7 7

8 Balance sheet highlights (RMB '000) At 31 Dec 2017 (2) At 31 Dec 2016 Change Total cash (1) 26,540,063 10,956, % Total assets 125,805,861 66,418, % Total assets less current liabilities 50,232,707 30,275, % Equity attributable to owners of the Company 10,155,036 8,918, % Total equity 27,126,290 14,631, % Note: (1) Total cash = Cash and cash equivalents + Restricted bank deposits. Unrestricted cash accounted for 93% of total cash (2) As of 31 Dec 2017, credit facilities amounted to approx. RMB51.89bn, of which approx. RMB16.90bn were unutilized 8 8

9 Key financial ratios At 31 Dec 2017 At 30 Jun 2017 At 31 Dec 2016 Net debt / Total equity (1) 51.0% 63.0% 50.7% Net debt / Total assets 11.0% 13.6% 11.2% Net debt / EBITDA (2) 3.5x 4.2x 3.3x Total liabilities / Total assets 78.4% 78.4% 78.0% Liquidity ratio (3) 1.5x 1.6x 1.7x Note: (1) Net debt = Total debt - Total cash (2) EBITDA = Profit before tax + Finance costs + Depreciation + Amortization (EBITDA for 30 Jun 2017 is based on the LTM EBITDA up to 30 Jun 2017) (3) Liquidity ratio = Current assets / Current liabilities 9 9

10 Debt structure 2017 Debt breakdown by type Upgraded credit ratings Offshore bank borrowings 14% The only PRC developer with credit rating upgrades from all 3 major international rating agencies since 2016: Fitch BB- (Dec 2016); Moody s B1 (Mar 2017); S&P B+ (Jun 2017) Domestic credit rating was upgraded to AA+ by United Credit Ratings in Jun 2017 Offshore senior notes 16% Onshore corporate bonds 15% Trust loans 8% Onshore bank borrowings 47% Onshore: 70% Offshore: 30% Historically low coupon rate In Sep 2017, successfully issued USD250mn 5.375% senior notes at par due 2022 which was oversubscribed by 12x In Jan 2017, became the first Asian issuer to complete USD250mn 6.35% senior notes at par due 2020 which was oversubscribed by 10x Close cooperation with banks 12% 10% 8% 6% 11.4% Declining borrowing costs 10.2% 9.5% 8.1% 7.2% Note: As of 31 Dec 2017, total debt amounted to approx. RMB40.37bn. Total cash amounted to approx. RMB26.54bn, sufficient to cover shortterm borrowings of approx. RMB20.49bn In Mar 2018, successfully secured approx. HKD1.6bn three-year US/HK dollar dual currency club loan with an interest rate of LIBOR/HIBOR+3.95% per annum from Nanyang Commercial Bank, Hang Seng Bank and China Minsheng Bank Corporation Hong Kong Branch In Jul 2017, successfully obtained approx. HKD500mn term loan with an interest rate of HIBOR+3.75% by Nanyang Commercial Bank In Feb 2017, successfully secured approx. HKD1.5bn three-year US/HK dollar dual currency club loan with an interest rate of LIBOR/HIBOR+4.5% per annum from Hang Seng Bank, Nanyang Commercial Bank, Bank of East Asia, Chong Hing Bank, Chiyu Banking Corporation and Wing Lung Bank As of 31 Dec 2017, credit facilities from major banks in China including Big 4 Chinese banks, Bank of Communications, Ping An Bank, China Bohai Bank and China Merchants Bank amounted to approx. RMB51.89bn, of which approx. RMB16.90bn were unutilized Sydney projects obtained loans from the Big 4 Australian banks including Commonwealth Bank of Australia and Westpac Banking Corporation. Canadian projects obtained loans from the Big 5 Canadian banks including Bank of Montreal and HSBC. Aoyuan has become one of the few PRC developers who has successfully gained access to local bank financing 10 10

11 Cash flow & CAPEX Aoyuan adheres to a principle of prudent financial management by recycling capital through rapid presales to ensure a sound financial profile and healthy cash flow 2017 Cash flow 2017 Cash collection (RMB billion) (RMB billion) Opening cash balance (as of 1 Jan) Operating cash flow New bank borrowings Capital injection from noncontrolling shareholder Proceeds from senior notes/ domestic bonds issuance Land acquisition (1) Construction expenses Tax expenses SG&A Interest expenses Dividend payments Debt repayment Redemption of senior notes Other cash outflow Ending cash balance (as of 31 Dec) % Cash collected Contracted sales Note (1) : As of 31 Dec 2017, the outstanding land premium was approx. RMB6.25bn which is expected to be fully paid within a year 11 11

12 3. Business Operations 12 12

13 1,132 1, ,688 1,546 1,546 1,826 1,021 1,225 2,531 1,403 1,433 2,655 1,140 1,732 2,511 1,512 2,104 4,055 2,073 2,630 2,505 2,967 3,631 4,081 1,890 2,886 4,322 2,140 3,393 4,050 4,280 5,320 11,196 Robust and sustainable contracted sales growth Yearly contracted sales (RMB million) 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10, ,251 10,038 12,223 15,171 25,602 45,590 73, Target 2018 contracted sales target increased by 60% yoy (RMB million) 12,000 10,000 8,000 First half of the year Monthly contracted sales Second half of the year 6,000 4,000 2,000 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

14 Contracted sales and recognized sales Contracted sales and recognized sales (GFA) Contracted sales and recognized sales (Value) (1)(2) (000's sqm) (RMB million) (RMB per sqm) Contracted sales and recognized sales (ASP) 5,000 4,500 4,000 3,500 3,000 2,500 2,980 4,487 2,428 50,000 45,000 40,000 35,000 30,000 25,000 25,602 45,590 12,000 10,000 8,000 6,000 8,591 6,993 10,158 7,397 2,000 1,500 1, ,607 20,000 15,000 10,000 5,000 11,240 17,960 4,000 2, Contracted GFA sold Recognized GFA sold Contracted sales Recognized sales Contracted ASP Recognized ASP Note(1): The attributable contracted sales accounts for 85% of contracted sales in 2017, staying at high industry level Note(2): As of 31 Dec, 2017, contracted sales that were yet to be recognized as revenue amounted to approx. RMB51.6bn 14 14

15 Contracted sales breakdown 2016 contracted sales: RMB25.60bn 2017 contracted sales: RMB45.59bn By region Bohai Rim 2% East China 10% Core region of Central & Western China 24% Offshore 4% Guangzhou 13% South China (excl. Guangzhou) 47% By region Core region of Central & Western China 12% East China 11% Bohai Rim 3% Guangzhou 14% South China (excl. Guangzhou & Shenzhen) 45% Offshore 3% Shenzhen 12% By product 2016 contracted sales: RMB25.60bn By product 2017 contracted sales: RMB45.59bn Commercial properties 27% Residential properties 73% Commercial properties 23% Residential properties 77% 15 15

16 Recognized sales breakdown By region 2016 recognized sales: RMB11.24bn 2017 recognized sales: RMB17.96bn East China 13% Bohai Rim 6% Guangzhou 29% Core region of Central & Western South China China (excl. Guangzhou) 23% 29% By region East China 12% Core region of Central & Western China 23% Bohai Rim 3% Guangzhou 15% South China (excl. Guangzhou) 47% 2016 recognized sales: RMB11.24bn 2017 recognized sales: RMB17.96bn By product By product Commercial properties 29% Residential properties 71% Commercial properties 27% Residential properties 73% 16 16

17 New starts GFA and completed GFA Aoyuan maintains flexible CAPEX management and sound cash flows via managing new starts GFA and completed GFA to adapt to market changes (000's sqm) Shenzhen Aoyuan Jade Bay 7,000 6,650 6,000 5,000 4,000 3,605 3,000 3,060 2,000 2,037 2,212 1,368 1, New starts GFA Completed GFA 17 17

18 Upgraded product and further enhanced competitiveness Aoyuan s product quality is well recognized through enhanced value-added content Guangzhou Aoyuan Lianfeng State was awarded the 54th Gold Nugget Awards for Best International Residential Project in Jun 2017 Guangzhou Aoyuan Lianfeng State Shenzhen Aoyuan Jade Bay Guangzhou Aoyuan Glorious Mansion Zhuhai Aoyuan Seaview Mountain 珠海奥园广场 18 18

19 Upgraded product and further enhanced competitiveness (cont.) Product quality is well recognized through enhanced value-added content Guangzhou Aoyuan Lianfeng State was awarded the 54th Gold Nugget Awards for Best International Residential Project in Jun 2017 Foshan Aoyuan Peach City Huizhou Aoyuan Yushan Lake Ningbo Aoyuan Lake Bay Chengdu Chenghua Aoyuan Plaza 19 19

20 Asset-light operating model of commercial development Aoyuan maintains its commercial development strategy of primarily saleable properties and supplemented by investment properties to diversify income streams and add values to residential properties Successful Model: Guangzhou Panyu Aoyuan Plaza Total GFA: approx. 250,000 sqm (Commercial: 100%) Development model: Shopping street/ Apartments(sold) + Shopping mall (owned) Guangzhou Panyu Aoyuan Plaza shopping mall was opened in Dec Occupancy rate is 98% Successful Replication: Chongqing Aoyuan Panlong Yihao Total GFA: approx. 460,000 sqm (Residential: 70%, Commercial: 30%) Development model: Residential/ Shopping street/ Offices/ Commercial apartments (sold) + Shopping mall (owned) Chongqing Panlong Aoyuan Plaza was opened in Dec Occupancy rate is 100% Project Location Status Product type (1) GFA (sqm) Interest (%) 1 Guangzhou Panyu Aoyuan Plaza Panyu, Guangzhou Leased C, S 80,500 54% 2 Guangzhou Aoyuan Panyu, Guangzhou Leased C, S 8, % 3 Shenyang Aoyuan The Metropolis Shenyang, Liaoning Leased H 4, % 4 Guangzhou Aoyuan City Plaza Panyu, Guangzhou Leased C, CH 6, % 5 Chongqing Panlong Aoyuan Plaza Chongqing Leased C, S 53,700 60% 6 Wuhua Aoyuan Plaza Meizhou, Guangdong Leased C, S 25, % 7 Jiaoling Aoyuan Plaza Meizhou, Guangdong Leased C, S 19, % 8 Guangzhou Luogang Aoyuan Plaza Huangpu, Guangzhou Leasing C 34,400 60% 9 Guangzhou Aoyuan Kangwei Plaza Zengcheng, Guangzhou Leasing C, S 60,000 51% 10 Zhuhai Aoyuan Plaza Zhuhai, Guangdong Leasing C, S 66,700 93% 11 Chongqing Aoyuan The Metropolis Chongqing Leasing C 19, % 12 Chongqing Chayuan Aoyuan Plaza Chongqing Leasing C 52,300 51% 13 Shenyang Aoyuan Convention Plaza Shenyang, Liaoning Leasing C, S 114, % 14 Liuyang Aoyuan Plaza Changsha, Hunan Leasing C, S 25, % 15 Bengbu Aoyuan Ginza Bengbu, Anhui Leasing C, S 35, % 16 Chengdu Chenghua Aoyuan Plaza Chengdu, Sichuan Leasing C, S 65,000 70% Note (1): C = Commercial; S = Retail shop; CH = Club house; H = Hotel Major investment properties 20 20

21 Remarkable development in offshore markets through localization strategies Aoyuan has established itself as a genuine local developer and achieved remarkable performance by implementing localization strategies for developing offshore projects Achieved contracted sales target for three consecutive years: Since the offshore market expansion in 2015, the accumulated contracted sales has exceeded RMB3bn, achieving sales target for three consecutive years Projects have successfully moved into construction phase and demonstrated strong execution : One30 Hyde Park Sydney, Maison 188 Maroubra Sydney, and Mirabell Turramurra Sydney have entered into construction phase, and will deliver on time as planned. Aoyuan has become one of the few developers to commence construction among PRC developers in offshore markets Funds from local financing channels: Aoyuan obtained loans for land acquisition and constructions from Big 4 Australian banks including Commonwealth Bank of Australia and Westpac Banking Corporation for Sydney projects, while loans were obtained for land acquisition from Big 5 Canadian banks including Bank of Montreal and HSBC for Canadian projects. Aoyuan has established a good credit record locally and become one of the few PRC developers that has access to local financing channels in offshore markets Experienced local management team and good relationship with professional consultants: Aoyuan has offshore management teams consisting of local professionals with a wealth of experience in property development, operations and financial management, and have established long-term relationships with reputable local professional consultants, enhancing project execution to cater local needs Primarily target local customers: Local buyers accounted for 75% of Aoyuan s offshore projects, capturing the strong local housing demand One30 Hyde Park Sydney and its construction progress (Aoyuan s first offshore project) Maison 188 Maroubra Sydney and its construction progress (Aoyuan s first offshore project developed independently) 21 21

22 4. Strategic Layout 22 22

23 Sufficient and quality land bank Based in Guangdong with a main focus on Big Bay Area, Aoyuan has a strategic layout in South China, core region of Central & Western China, East China and Bohai Rim As of 31 Dec 2017, Aoyuan had 135 projects with a total GFA of approx mn sqm (attributable: 80%) and total saleable resources of approx. RMB282.3bn, which is sufficient for development needs in approx. three years Region Province/ City Contribution (by total GFA) Total GFA ( 000 sqm) Expected Saleable Resources (RMB mn) 20,000 15,000 10,000 5, ,000 14,638 Beijing Shenzhen 5,894 Overseas 4,124 3,337 2,954 2,800 2,238 1,925 2,680 1,335 2,190 1,434 1, Hubei Sichuan Guangzhou Zhejiang Shandong Jiangsu Chongqing Shaanxi Guangxi Guangdong (excl. Guangzhou & Shenzhen) Fujian Beijing Average land cost by region Anhui Hunan Liaoning Shandong Sichuan Anhui Hubei Zhejiang Chongqing Jiangxi Guizhou Hunan Fujian Guangdong Macau Guangxi Jiangsu Average land cost: RMB2,131 per sq.m. Guizhou Liaoning Jiangxi Shaanxi South China Core region of Central & Western China East China Bohai Rim Offshore Guangzhou & Shenzhen Others, Guangdong 1,890 33,723 8, ,630 Guangxi 3,117 23,689 Subtotal 56% 13, ,042 Chongqing 1,042 7,297 Sichuan 795 8,746 Hunan 2,073 14,719 Hubei 333 3,499 Shaanxi 288 2,650 Jiangxi 250 1,627 Guizhou 302 1,208 Subtotal 20% 5,084 39,746 Zhejiang 665 7,984 Jiangsu 1,342 14,762 Anhui 503 5,528 Fujian 614 8,283 Subtotal 13% 3,124 36,557 Liaoning 1,426 7,845 Beijing 176 5,100 Shandong 501 4,505 Subtotal 8% 2,103 17,450 Australia ,136 Canada ,511 Macau Subtotal 3% ,546 Grand total 100% 24, ,

24 Sufficient and quality land bank (cont.) Land bank breakdown by region (by land cost) Land bank breakdown by region (by saleable resources) Bohai Rim 8% Offshore 7% Bohai Rim 6% Offshore 10% East China 12% South China 55% East China 13% South China 57% Core region of Central & Western China 18% Core region of Central & Western China 14% Land bank breakdown by type (by GFA) Investment properties 3% Auxilliary facilities 3% Land bank breakdown by status (by GFA) Completed and held for sale 7% Completed and sold, but yet to be delivered/ Auxiliary facilities 4% Commercial properties 19% Residential properties 75% Under development 36% Held for future development 53% 24 24

25 Guangdong-Hong Kong-Macau Big Bay Area: China s new economic growth engine The 9+2 city cluster in Big Bay Area possesses strong economic power, high aggregation of industries, close connection to inland areas and high openness to the world. It will grow into a top international bay area and a world-class metropolitan cluster, serving as a key growth engine for China s economic development 2004 Release of the first regional ministry-province cooperation plan--pearl River Delta Urban Agglomeration Coordinated Development Plan (USD tn) 1.6 GDP and GDP Growth in (+3.5%) 1.34 (+7.9%) 1.3 (+3.6%) Upgraded from regional cooperation plan to national strategy The State Council released Reform and Development Plan of the Pearl River Delta Region ( ) to encourage Guangdong, Hong Kong and Macau to develop regional coordinated development plans Key Action Plan for the Construction of Livable Bay Area in the Pearl River Delta Region jointly formulated by the governments of Guangdong, Hong Kong, and Macau Concept of "Bay Area Economy was first mentioned in the Shenzhen Government Work Report Release of Vision and Action to Promote the Construction of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, enhancing the construction of Guangdong-Hong Kong-Macau Big Bay Area into a national strategic plan Construction of Guangdong-Hong Kong-Macau Big Bay Area was included into the National 13th 5-Year Plan In March, the State Council s Government Work Report mentioned research and formulation of development plan in Big Bay Area The Framework Agreement for Deepening the Cooperation between Guangdong, Hong Kong and Macau to Promote the Construction of the Big Bay Area was signed in July Development Plan of the City Cluster in Guangdong-Hong Kong- Macau Big Bay Area will be released soon; establishment of a worldclass Bay Area will evolve from strategic planning into full-speed implementation Expressway ~5,600km (2016) HK-Zhuhai-Macau Bridge (Commence operation in 2018) Shenzhen- Zhongshan Bridge (Commence operation in 2024) 3 hrs 30 mins 3 hrs 30 mins HK-Zhuhai Zhongshan- Shenzhen ~8,800km (2020) Construction of 1 Hour Living Circle through integration Inter-city railway 3,200km (2016) 4,400km (2020) Guangzhou-Shenzhen- Hong Kong High Speed Rail (HK section to commence operation in 2018) 45 mins 18 mins HK-Shenzhen 2 hrs 48 mins HK-Guangzhou Eastern region Central region Western region 0.8 (+2.7%) 纽约湾区 NY Bay Big Bay Tokyo 东京湾区 Bay San 旧金山湾区 Francisco Area Area Area Bay Area Source: China Index Institute Enhanced industrial upgrade and market integration HK Global financial, shipping and trading hub Shenzhen International innovative services center Dongguan Global smart manufacturing powerhouse Huizhou World-class base for petrochemical industry Lingnan cultural center and Guangzhou South China heavy industries center Foshan International manufacturing center Zhaoqing Hub for transformation and upgrade of traditional industries Macau Zhuhai Zhongshan Jiangmeng Leisure and tourism hub National equipment manufacturing center One of the appliances base in China National advanced manufacturing base 25 25

26 First mover in Big Bay Area with a full coverage Benefiting from national policies, Aoyuan seizes the first-mover advantages and leverage the rapid growth trend with a full coverage of 9+2 cities in Big Bay Area Zhaoqing Guangzhou Foshan Huizhou Dongguan Shenzhen Zhongshan Bridge Shenzhen Zhongshan Hong Kong Hong Kong Zhuhai Jiangmen Macau Bridge Zhuhai Macau Guangzhou Headquartered in Guangzhou with a strong presence in Guangdong, Aoyuan has abundant local resources and experiences, including land, talents, network and capital Contracted sales from Big Bay Area reached RMB24.3bn in 2017, accounted for 53% of total contracted sales Aoyuan has a total of 50 projects covering all 9+2 cities in Big Bay Area. Total GFA of land bank is approx. 7.53mn sqm with total saleable resources of approx. RMB98.0bn Shenzhen Zhuhai Foshan City Total GFA ( 000 sqm) Total Saleable Resources (RMB bn) Guangzhou 1, Shenzhen Huizhou Dongguan Zhongshan Zhuhai Foshan 1, Huizhou 1, Dongguan Jiangmen Zhaoqing Macau Zhongshan Jiangmen 1, Zhaoqing Hong Kong & Macau Total 7,

27 Redevelopment projects in Big Bay Area and other regions Aoyuan has 16 redevelopment projects at different phases in Big Bay Area and other regions with planned total GFA of approx mn sqm Project City Type Status Site Area ( 000 sqm) Planned Total GFA ( 000 sqm) 1 Guangzhou Panyu Nitrogen Fertilizer Plant Guangzhou, Guangdong Old factory Redevelopment planning application Zhuhai Cuiwei Village Zhuhai, Guangdong Old village Redevelopment planning application 310 1,470 3 Zhuhai Shuiwengkeng Village Zhuhai, Guangdong Old village Redevelopment planning application Zhuhai Gongbei Lian an Village Zhuhai, Guangdong Old village Government approval; Compensation agreement Zhuhai Gongbei Guanzha Village Zhuhai, Guangdong Old village Government approval; Compensation agreement Zhuhai Gongbei Gaosha Village Zhuhai, Guangdong Old village Government approval; Compensation agreement Zhuhai Xiaxu Village Zhuhai, Guangdong Old village Redevelopment planning application Zhuhai Qianshan Anlian Road Zhuhai, Guangdong Old factory Redevelopment planning application Zhuhai Yafang Building Zhuhai, Guangdong Old factory Redevelopment planning application Zhuhai Pingsha Aoyuan Plaza Zhuhai, Guangdong Old factory Redevelopment planning application Zhuhai Jianghai Electronics Factory Zhuhai, Guangdong Old factory Cooperation agreement Dongguan Pailouji Village Dongguan, Guangdong Old village Decision on early-stage partner Dongguan Shimei Village Dongguan, Guangdong Old village Decision on early-stage partner Nanning Nantang project Nanning, Guangxi Old village Redevelopment planning application 290 1, Nanning Chendong Village Nanning, Guangxi Old village Redevelopment planning application 760 3, Hebei Bazhou Bazhou, Hebei Old village Redevelopment planning application Case study 1: Redevelopment and transformation timetable for old factories in Zhuhai Total 2,570 10,530 Cooperation agreement Confirm redevelopment plan Redevelopment planning application State-owned land ownership certificate 1-3 months 1-3 months 1-3 months 1-3 months Case study 2: Redevelopment timetable for old villages in Zhuhai Villagers general assembly to decide on redevelopment Villagers general assembly to decide on earlystage partner Redevelopment planning application Government approval; Compensation agreement State-owned land ownership certificate 1-3 months 1-3 months 6-9 months 3-6 months 1-3 months 27 27

28 Redevelopment projects in Big Bay Area and other regions (cont.) Case study 3: Zhuhai Aoyuan Plaza Type: Old factory redevelopment Total GFA: 271,000 sqm Avg. land cost: RMB2,732 per sqm Accumulated ASP: RMB20,132 per sqm Accumulated contracted sales: approx. RMB4.23bn Redevelopment timetable: Dec 2014: Redevelopment planning application submitted Mar 2015: Redevelopment planning application to Zhuhai City Planning Commission Jun 2015: Land transfer contract signed Jul 2015: Obtained land ownership certificate Oct 2015: Launched for presales Case study 4: Guangzhou Luogang Aoyuan Plaza Type: Old village + old factory redevelopment Total GFA: 334,000 sqm Avg. land cost: RMB4,858 per sqm Accumulated ASP: RMB16,493 per sqm Accumulated contracted sales: approx. RMB4.31bn Redevelopment timetable: Jun 2012: Signed cooperation agreement with village Jun 2012: Redevelopment plan approved Jun 2013: Phase 1 (old village for open auction) May 2014: Phase 2 (old factory for open auction) Jun 2014: Launched for presales Zhuhai Aoyuan Plaza and its construction progress (Aoyuan Zhuhai redevelopment project) Guangzhou Luogang Aoyuan Plaza and its construction progress (Aoyuan Guangzhou redevelopment project) 28 28

29 Proactive land bank replenishment In 2017, Aoyuan acquired 58 projects with newly added GFA of approx mn sqm (M&A: 81%) and newly added saleable resources of approx. RMB166.9bn, sufficient to support higher sales targets in the coming two years at reasonable cost Region South China Province/ City Avg. land cost (RMB/sqm) Total GFA ( 000 sqm) Attributable GFA ( 000 sqm) Attributable land cost (RMB mn) Interest (%) Big Bay Area 2,640 4,574 2,755 7,000 60% Guangdong (excl. Big Bay Area) 1, % Guangxi 1,229 1, ,261 73% Regional distribution (by GFA) Offshore Bohai Rim 5% 5% Core region of Central & Western China Subtotal 2,285 6,333 4,083 9,180 64% Chongqing 1, % Sichuan 5, , % Hunan 1,198 1, ,021 69% Hubei 4, , % Guizhou % Shaanxi % East China 17% Core region of Central & Western China 24% South China 49% Subtotal 1,755 3,055 2,315 4,485 76% East China Bohai Rim Offshore Zhejiang 3, ,008 79% Jiangsu 2,216 1, ,355 73% Fujian 1, % Subtotal 2,142 2,211 1,551 3,966 70% Beijing 14, , % Shandong 2, ,117 77% Subtotal 5, ,755 83% Australia 1, % Canada 7, , % Regional distribution (by land cost) Bohai Rim 13% East China 15% Offshore 9% South China 46% Macau 58, % Subtotal 4, ,718 99% Grand total 2,446 12,861 9,092 24,104 71% Core region of Central & Western China 17% 29 29

30 Proactive land bank replenishment (cont.) High-quality projects successfully acquired since IPO Breakdown of land bank acquired since IPO (by land cost) No. Avg. land cost (RMB/sqm) Total GFA (sqm) Total cost (RMB mn) Bohai Rim 10% Offshore 6% , ,583,868 3, ,933 1,268,457 3,721 East China 12% South China 52% ,178 1,874,914 4, ,245 2,232,579 5, ,715 2,657,445 4, ,312 2,491,800 5, ,170 3,138,700 9, ,446 12,861,278 31,458 Total 125 2,227 30,450,524 67,808 Core region of Central & Western China 20% As of 31 Dec 2017, land bank in Tier 1 and 2 cities and its surrounding city clusters accounted for 82% of total land cost Aoyuan implements a balanced city layout with a main focus on Big Bay Area while further expanding in East China and core region of Central & Western China. Aoyuan adheres to a disciplined land bank replenishment strategy, building a solid foundation for the strategic and sustainable development in the future 30 30

31 5. Appendix 31 31

32 Shareholding structure While maintaining a stable dividend policy, Chairman of Aoyuan has demonstrated strong confidence in Aoyuan s long term development and prospects through rounds of share purchases and buybacks (As of 14 Mar 2018) Guo Zi Wen/Guo Zi Ning *Deemed interests Approx. 54% Public Approx. 46% In Jan 2018, Chairman Guo Zi Wen acquired 1mn shares at an average price of approx. HKD5.93 per share, with a total consideration of HKD5.93mn, and his shareholding was approx. 54% In Mar 2017, Chairman Guo Zi Wen acquired approx mn shares at an average price of approx. HKD2.40 per share, with a total consideration of HKD128mn, and his shareholding increased to approx. 54% In Nov 2016, Aoyuan repurchased approx. 112mn shares at an average price of approx. HKD1.68 per share, with a total consideration of HKD188mn (approx. 4% of the entire issued share capital of Aoyuan) In Aug 2015, Chairman Guo Zi Wen acquired approx mn shares at an average price of approx. HKD1.65 per share, with a total consideration of HKD91.41mn, and his shareholding increased to approx. 50% In Jul 2014, Chairman Guo Zi Wen acquired approx mn shares at an average price of approx. HKD1.55 per share, with a total consideration of HKD86.97mn, and his shareholding increased to approx. 48%

33 Aoyuan: Breakthrough to Success Pioneer ( 开创 ) Founded in 1996, Aoyuan first introduced the "Sports + Property development concept with its branding philosophy of Building a Healthy Lifestyle. As a pioneer in composite real estate development in China, Aoyuan has successfully developed composite real estate projects with themes of education, regimen and healthcare, and commercial, etc.. Aoyuan was listed on the Main Board of SEHK in 2007 Breakthrough ( 破茧 ) Aoyuan received approx. HKD3.2bn in cash and recorded special gains of HKD1.1bn by successfully exiting 8 Chang an Ave Beijing project in Aoyuan was ready to unleash its potential, and persist with further breakthroughs. In the same year, Aoyuan successfully issued its first USD senior notes in the international capital markets. In 2013, contracted sales exceeded RMB10bn and more professional managers were attracted to join Aoyuan Take-off ( 起飞 ) In 2017, Aoyuan achieved contracted sales of RMB45.6bn with a growth rate of 78% yoy, representing a CAGR of 54% from 2012 to Monthly contracted sales in December 2017 amounted to RMB11.2bn, setting a historical high for single-month sales. The 2018 full-year contracted sales target is set to be RMB73bn Upgrade ( 跃升 ) The only PRC developer with credit rating upgrades from all 3 major international rating agencies since 2016, namely Fitch, Moody s and S&P; Domestic credit ratings was also upgraded by United Credit Ratings. With financing cost optimization and soaring share price, following the recent inclusion in the Shenzhen-Hong Kong Stock Connect, Aoyuan is regarded as one of the best performing PRC property developer, reaffirming its outstanding track records and financing capabilities in capital markets 33 33

34 Professional management team and outstanding corporate governance Board of Directors 4 Executive Directors and 3 Independent Non-executive Directors Audit Committee, Remuneration Committee, and Nomination Committee ZHONG Ping MA Jun GUO Zi Ning GUO Zi Wen TSUI King Fai CHEUNG Kwok Keung HU Jiang Executive Director, CFO Executive Director, COO Vice Chairman, CEO Chairman, Group Founder Independent Nonexecutive Director Independent Nonexecutive Director Independent Nonexecutive Director Senior Management Financial and Fund Management Investment and Fund Management Capital Markets, International Investment Group Financial Management, HR & Administration Management Operations Management Commercial Group Project Management Design and R&D CHEN Zhi Bin CHEN Yong Jacky CHAN ZHONG Ping MA Jun ZHANG Jun XIAO Yi GAO Xiang Dong Vice President Vice President Vice President CFO COO Vice President Vice President Assistant to President Attracting experienced talents to strengthen professional management team, upholding excellent compliance in corporate governance and maintaining high corporate transparency to enhance the core competitiveness and ensure balanced and sustainable development 34 34

35 6. Investor Relations 35 35

36 IR management Committed to professional and effective investor relations management, Aoyuan strives to maintain a longterm interactive relationship with investors. Aoyuan upholds an open and candid attitude to listen to the capital markets and maintain a high level corporate transparency and corporate governance Close and two-way communication with investors 2017 Investor relations activities in 2017 Organized and participated in a total of 277 investor relations activities in 2017, including 212 management meetings, 23 telephone/ video conferences, 4 investor briefings and press conferences, 10 site visits, 11 investor conferences and 17 investor roadshows held in Hong Kong, Singapore, Europe, Shenzhen, Shanghai and Beijing, etc Met and communicated with 967 institutional investors from 654 investment institutions in 2017 to enhance investor s awareness of latest development in business performance, operating conditions and development strategies, to understand capital market views and provide timely feedback to top management Project site visit Investor 10 times conference 11 times Investor roadshow 17 times Telephone/ video conference 23 times Management meeting 212 times Investor briefing and press conference 4 times Asia Pacific (excl. Mainland China & Hong Kong ) 15% Investment institutions by region Europe 7% America 7% Mainland China & Hong Kong 71% Investment institutions by investor type Bond 48% Equity 52% 36 36

37 IR management (cont.) Committed to professional and effective investor relations management, Aoyuan strives to maintain a longterm interactive relationship with investors. Aoyuan upholds an open and candid attitude to listen to the capital markets and maintain a high level corporate transparency and corporate governance Annual General Meeting Results Briefing Reverse Roadshow Annual General Meeting Results Briefing Investor Roadshow Investor Conference Investor Site Visit Investor Roadshow 37 37

38 IR contacts Jacky Chan Group Vice President President of International Investment Group HK: (852) China: (86 20) Anthony Cheng Financial Controller HK: (852) China: (86 20) Emma Qi Deputy Head of Corporate Finance and Investor Relations HK: (852) China: (86 20) Heng Tam Assistant Investor Relations Manager HK: (852) China: (86 20) Company HQ Aoyuan Mansion, No.108, Huangpu Avenue West, Tianhe, Guangzhou Follow us on: HK Office Unit , 19/F, One Peking, No.1 Peking Road, T.S.T, Hong Kong Aoyuan WeChat Official Account Aoyuan Club WeChat Subscription Account 38 38

39 Disclaimer This presentation was prepared by China Aoyuan Property Group Limited (the Group or the Company ) for reference only. This presentation may not be reproduced or redistributed to any persons without explicit authorization from the Company. Neither the Company nor any of its respective subsidiaries, directors, employees or advisors, directly or indirectly, gives any representation or warranty as to the completeness and accuracy of all the information contained in this presentation (including all forward-looking statements). The information contained in this presentation should be considered in the context of the circumstances prevailing at the time of presentation and has not been, and will not be, updated to reflect material developments which may occur after the date of the presentation. This presentation contains statements that reflect the Company s beliefs and expectations about the future. These forwardlooking statements are based on a number of assumptions about the Company s operations and factors which are beyond the Company s control, and accordingly, actual results may differ materially from these forward-looking statements. The Company does not undertake to revise forward-looking statements to reflect future events or circumstances. The Company expressly disclaims all the liabilities (in negligence or otherwise) for any loss incurred or sustained by the participants of this presentation, their employers, entities, agents or any of their related parties as a result of using the information contained in this presentation. The materials and information in this presentation are for informational purposes only and do not constitute an offer or solicitation for the purchases or sale of any securities or financial instruments or to provide any investment service or investment advice