Country Garden China Daily: Net Profit Of 21.9 Billion Yuan In The First Half Of The Year

In 2020, the performance of the epidemic situation tests the quality of leading real estate enterprises.

However, in the first half of the year, the growth rate of the real estate company was still at the top of the 50 billion yuan, while the sales volume of the company remained at the top, while the company's net income remained at a high level of 37.5 billion yuan.

It is worth noting that country garden has changed from simple pursuit of scale to high-quality development, as well as focusing on risk prevention, which is reflected in the improvement of various financial indicators, such as the decrease of net debt ratio and the decrease of marketing expenses.

Mo bin, President of country garden group, said that the real estate policy and market tend to be stable, and a stable and healthy development market is the biggest benefit for country garden, which has a full range of urban layout.

Like other leading real estate enterprises, country garden is also diversifying in addition to its stable development business. However, it is not easy to achieve performance growth through transformation. The performance feedback of new business needs full patience.

Sales or new high

The impact of the epidemic on the real estate industry can be seen from the financial report of country garden.

In the first half of the year, country garden ranked first in the industry with a total sales volume of 372.31 billion yuan. According to the financial report, country garden achieved 270 billion equity sales in the first half of the year, a year-on-year decrease of 4.45%, and 43.95% of the annual target.

Cheng Guangyu, executive vice president of country garden group, said that the company's sales declined in January and February due to the impact of the epidemic. However, the company's sales in March recovered to the same period last year, which was slightly better. From January to July, it was close to the level of the same period last year, and I believe that it can surpass that of last year in August.

Since the year-on-year sales of Bigui have increased for three consecutive months. Among them, the equity sales in July reached 54.28 billion yuan, with a year-on-year increase of 27.52%. In the first seven months, the accumulated equity sales of country garden reached 321.23 billion yuan, a year-on-year decrease of 1.01%, and the decline rate narrowed to 52.89% of the annual target.

In 2020, the marketable resources of country garden's rights and interests will reach 906.6 billion yuan. According to the elimination rate of about 70%, country garden's equity sales target in 2020 will be more than 600 billion yuan.

Looking forward to the second half of the year, country garden said it was confident to achieve its sales target. Management said that it is expected to achieve a growth rate of about 10% this year, setting a new sales record again.

In addition, according to the interim report, country garden achieved a total operating revenue of 184.96 billion yuan in the first six months, with a net profit of about 21.93 billion yuan. Shareholders should account for about 14.61 billion yuan of core net profit, continuing to lead the industry.

At present, there are many environmental risks. For the real estate enterprises in the capital intensive industry, good financial management and control ability has become unprecedented important.

Since 2018, country garden has continued to reduce its debt ratio. By the end of June 2020, the asset liability ratio of country garden was 88.03%, a year-on-year decrease of 1.3%, and the net loan ratio was 58%, lower than the industry average (90%).

At present, the total interest bearing liabilities of country garden is 342.04 billion yuan, which is 7.5% lower than that at the end of 2019; the book cash available balance is 205.52 billion yuan, and the short-term debt due within one year is 98.388 billion yuan, and the cash short debt ratio is 2.08 times.

The current industry "cash king" trend is obvious, for this reason, country garden actively "blood". In the first half of the year, country garden continued to strengthen the assessment of the target of payment collection, and realized the return of equity sales of 250.93 billion yuan, with the equity recovery rate as high as 94%, higher than 90% for five consecutive years.

At the same time, country garden actively issues bonds in the financing window period through multiple financing channels. According to the announcement statistics, as of July 28, country garden has issued five overseas bonds in 2020, with a total financing amount of US $2.544 billion, and the coupon rate is in the range of 4.2% - 5.6%.

In the first half of the year, the financing cost of country garden was lower than the industry average level. Wind data shows that in the first half of 2020, the financing cost of mainland real estate enterprises to issue foreign debts is 8.41%. Therefore, the financing cost of country garden can be further reduced. By the end of the first half of the year, the financing cost of country garden was 5.85%, which was 49 basis points lower than the end of last year.

Diversified transformation

In recent years, real estate enterprises have made cross-border transformation. Country garden is a sample of diversified transformation of leading real estate enterprises. Focusing on the main business of real estate, country garden has successively arranged new business forms such as construction robot, Qianxi robot catering, modern agriculture, community retail, etc., and has continuously invested to seek transformation and bring benefit growth.

In June 2018, country garden announced the establishment of Country Garden Agricultural Holding Co., Ltd. to march into modern agriculture; in July, it established bozhilin robot company to enter the field of robots, and then made efforts to robot catering and new retail sectors. Country garden's diversified transformation span is large, the pace is fast, has always been concerned.

As of August 14, 2020, bozhilin robot company has submitted 2314 patent applications and 567 authorized patents. It has a number of independent core technologies in key fields. At present, there are 50 types of construction robots under research, of which 35 have been put into site testing, filling the industry gap.

Mo bin, President of country garden, revealed at the performance meeting that some construction robots will be promoted on a small scale next year and strive to enter the market the following year.

Robot restaurant is a new business segment vigorously promoted by country garden this year. Biguiyuan Qianxi robot group, established in 2019, is committed to building the world's largest intelligent catering group integrating development, production, operation and supply chain system.

At present, Qianxi group has 6 robot restaurant stores put into operation. Up to now, more than 205 patents of various types have been granted to the group, and more than one thousand patents have been applied for by the group. Its products include mini ice cream machine, container pot rice robot, coffee machine, hamburger machine, which has entered the stage of mass production.

The country garden has also made great progress in modern agriculture, which started earlier. In addition, the community retail sector is also a key part of country garden's diversified business development.

However, up to now, the new business has not yet begun to make profits, which is inconsistent with the resources it has invested. In this regard, Wu Bijun, CFO of country garden, said that he hoped that the new business could quickly contribute to performance and bring benefits.

Talking about the current and future market, Wu Bijun said that in the past, the market was more volatile, but now the market is becoming more stable and less volatile. Real estate enterprises do not have to spend so much energy thinking about the price rise and fall. The land price and house price tend to be stable, and the gross profit rate tends to be stable. The company hopes to continuously improve the net profit margin through the control of expenses and costs, as well as fine management.

Mo bin also said that a stable and healthy market is beneficial to country garden and the real estate industry. In a stable market, competitive companies will win. The competitiveness of country garden comes from six aspects, namely, high efficiency, cost, product, marketing, service and science and technology.

Mo bin, who had been rumored to leave the company for many times, took this opportunity to say that he would not leave country garden, and would advance and retreat with the company, "my career will definitely end in country garden, and I will follow country garden to the end."

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