Value Highlights Under "Three Red Lines" Of Steady Operation

Recently, Longhu Group Holdings Co., Ltd. announced its annual performance as of December 31, 2020.

In 2020, the outbreak and recurrence of the new epidemic situation in the world has changed the environment and development pattern. Facing the market full of challenges and uncertainties, Longhu group adheres to the market and operates steadily. The group achieved a turnover of 184.55 billion yuan, a year-on-year increase of 22.2%.

The net profit attributable to shareholders was 20 billion yuan. After excluding the influence of changes in fair value, the net profit attributable to the parent core was 18.69 billion yuan, up 20.2% year on year. Gross profit increased by 6.4% to 54.03 billion yuan on a year-on-year basis, with a gross profit margin of 29.3%. The core after tax profit margin is 14.7%, and the core equity profit margin is 10.1%.

Exceed sales target

With the continuous introduction of real estate policy regulation and strict control of financial risk policy, in 2020, the industry will gradually implement the main keynote of "no speculation in housing". In the face of challenging and uncertain market, Longhu group abides by the strategy and carries out firmly. The business volume of property development business is 170.98 billion yuan, and the total construction area of property delivered is 12.011 million square meters.

In the whole year, the sales of real estate development contracts reached 270.61 billion yuan, an increase of 11.6% year-on-year, exceeding the annual sales target of 260 billion yuan. From a regional perspective, the proportion of contract sales in the Yangtze River Delta, Western China, Bohai rim, South China and central China regions accounted for 31.1%, 24.7%, 22.7%, 15.2% and 6.3% respectively.

Longhu group strictly abides by the investment logic and discipline, firmly arranges the first and second tier high-energy cities, and moderately sinks the satellite city around the metropolitan area. In 2020, 121 plots of land will be added to the group for the first time into 8 cities such as Tangshan, Sanya and Lanzhou. The new land reserve construction area is 25.67 million square meters, and the equity area is 18.47 million square meters. The average cost of equity acquisition is 5687 yuan per square meter.

By the end of 2020, Longhu group has a total of 74 million square meters of total land storage, with an equity area of 52.79 million square meters. Its business has spread to 63 cities in five urban agglomerations around Bohai Sea, Western China, Yangtze River Delta, South China and central China. About 90% of the cargo volume is concentrated in the value areas of high-energy cities, and the cost is reasonable, which lays the foundation for the sustainable growth of profits.

In the first two months of 2021, the group's new land reserve has a total construction area of 810000 square meters and an equity area of 590000 square meters.

Expand the business of main channel

Longhu, as always, adheres to the strategy of steadily investing and holding properties, and has made solid progress in property investment businesses such as Tianjie and Guanyu. In 2020, the tax free rental income of property investment business will reach 7.58 billion yuan, with a year-on-year increase of 30.9%. Shopping malls, rental housing and other income accounted for 75.2%, 23.9% and 0.9% respectively.

In 2020, Longhu commerce will face the challenge of the epidemic through solid operation and rapid response. It will open 10 new shopping malls on time and with good quality throughout the year, including Jinsha Tianjie, Longhu Chongqing, the first high-speed rail transit oriented urban complex in China. Nationwide, there are 49 shopping malls in Longhu, with a floor area of 4.81 million square meters and an overall rental rate of 96.9%. Commercial rent increased by 23% to 5.82 billion yuan, and sales of shopping malls increased by 14% to 30.5 billion yuan.

During the epidemic period, Longhu Commerce focused on the off-line consumption recovery trend, took advantage of innovation mode, broke the spatial boundaries, and created diversified scene experience through the linkage of merchants, so that the passenger flow and sales rapidly recovered, and the rental rate reached 97% at the end of the year.

In terms of rental housing business, Longhu Guanyu has opened business in more than 30 high-level cities in China. By the end of 2020, the total number of rooms opened in Guanyu has reached 90000, with rental income of 1.81 billion yuan, a year-on-year increase of 55%. It has become a stable contribution source of the group's operating income. The rental rate of more than six months of operation was 93.3%, and the brand influence ranked the top three in the industry.

As the most affectionate part of Longhu brand, Longhu smart service has always been customer-oriented, extending the service boundary under the scale expansion with quality. From living communities to urban operations such as business writing, schools and transportation hubs, traditional property management is releasing more energy and imagination.

In 2020, Longhu smart service will basically complete the layout of the first and second tier core cities and the third and fourth tier potential cities, with revenue of 5.84 billion yuan (about 7.7 billion yuan before merger and offset), with a year-on-year increase of 36%. Over the past 20 years, Longhu smart service has covered 13 major formats, accelerating the exploration of urban space in the past year. By the end of 2020, the actual management area of Longhu smart service is 172 million square meters, and the owner satisfaction has exceeded 90% for 12 consecutive years.

At the beginning of 2021, a brand new life service brand - "gannet", which represents housing rental and housing decoration, should be upgraded as the main channel business. The derivation of residential demand is stimulating new growth momentum. Gannet is composed of gannet rent and sale and Pelican decoration. It provides one-stop real estate brokerage business, diversified asset management integration scheme and assembled whole solution of ready to live. Among them, the predecessor of gannet rental and sale is Longhu smart service leasing and selling center. Since 2008, Longhu leasing and selling system has been established for more than 10 years. By the end of 2020, more than 100000 users have been served by gannet rental and sale, and customer satisfaction has reached 96%.

Maintain excellent credit rating of private real estate enterprises

When risk prevention and deleveraging are emphasized again and again, real estate enterprises accelerate differentiation in financing channels, cost duration and other dimensions. Under the supervision background of "three red lines", the value of high-quality real estate enterprises has been highlighted. With its solid disk and excellent ability, Longhu group has realized the good issuance of domestic and foreign bonds in the capital market selection window, and its high credit at the bank end has guaranteed the double support of the line and interest rate.

Thanks to this, in 2020, the group maintained the low average borrowing cost of 4.39%, the average loan life was 6.59 years, the net debt ratio was 46.5%, the cash on hand was 77.83 billion yuan, the cash short debt ratio (cash on hand divided by debt due within one year) was 4.24 times. A series of indicators were maintained in the industry. The financial market was solid and stable, and the net debt ratio reached the low point in recent five years.

During the period, the group continued to be recognized by the capital market. Among them, Moody's, an international authoritative credit rating agency, raised its rating to Baa2 and Fitch upgraded its rating to a positive perspective. It is one of the investment grade real estate enterprises that has been upgraded by two international institutions in 2020, and is also a private real estate with investment grade rating of all three international credit rating agencies (S & P / Moody's / Fitch) At the same time, Dagong international, China credit rating and new century outlook are stable, which makes the group continue to maintain the excellent credit rating of private real estate enterprises.

On March 15, 2021, the group was officially incorporated into the constituent stocks of Hang Seng Index, and its good credit record, prudent and self-discipline financial performance, and sound business development were further recognized by the capital.

Adhere to the strategy of "space is service"

At the same time, the healthy development path of enterprises becomes more and more clear. In the face of the brand-new development stage of the industry, Longhu group will continue to adhere to the strategy of "space as service", and emphasize the multi-dimensional driving and collaborative development of six main channel businesses, including real estate development, commercial operation, rental housing, intelligent service, housing rental and sales, and housing decoration.

In 2021, the group will launch 271 major projects, including 65 new projects and 167 projects with a new phase of new format products, according to the different subdivision needs of rigid demand, improvement and commercial operation in the cities it is located in.

In terms of investment property, a number of shopping malls in Wuhan, Changsha, Hangzhou, Nanjing, Suzhou, Chengdu, Chongqing and Beijing will open in 2021; Longhu Guanyu, a rental housing business, will also steadily expand its stores and continuously improve its operation level. The steady development of the above two businesses will lay a solid foundation for the growth of the group's property investment business income.

Longhu intelligent service, a district service expert, will continue to adhere to the original intention and adhere to the quality. In a more abundant and diverse scene, it will continue to take "satisfaction + surprise" as the yardstick, and work together with other main waterways to cultivate "Longhu style happiness" in the hearts of owners with refined and intelligent management.

The newly upgraded housing rental and sales and housing decoration of the main channel business will continue to stimulate new growth momentum around the derivation of residential demand. It will not only focus on the commercial logic and operation of each channel, but also pay attention to the efficiency brought by full cohesion and coordination.

In addition to providing customers with high-quality products and services, Longhu group also scrupulously fulfills its social responsibility and carries forward the spirit of the times of public welfare and innovation. During the new epidemic in 2020, Longhu Group donated RMB 4, In August, the ESG Committee of the board of directors and the working group composed of various functions actively promoted the solid implementation of social and environmental commitments; in November, the Longhu public interest foundation was officially registered; in December, the green financial framework was completed. This year, the first independent sustainable development report of Longhu group will be released to improve the disclosure. The concept of symbiosis with the environment and win-win with fellow travelers has been injected into the growth gene of Longhu, so as to better fulfill the responsibilities of corporate citizens.

In the future, Longhu will always be full of awe, accumulate long-term value with continuous growth, know the time and understand the situation, and then plan, and be determined to practice to achieve the future.

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