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Monday, 20 August 2018, 19:26 HKT/SGT
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Joy City Property Announced 2018 Interim Results
Follow the trend in new consumption, profit and core net profit attributable to the owners of the Company gained a significant increase of 158.0% and 372.4% respectively

HONG KONG, Aug 20, 2018 - (ACN Newswire) - Joy City Property Limited ("Joy City Property" or the "Company", Stock Code: 0207) announce the consolidated results of the Company and its subsidiaries (the "Group") for the year ended 30 June 2018 (the "Period").

Results Summary:
- Profit of the Group amounted to RMB 2,262.1 million, representing a year-on-year increase of 61.3% of which, the profit attributable to the owners of the Company amounted to RMB 1,688.0 million, representing a year-on-year increase of 158.0%.
- Excluding the fair value changes after tax of investment properties and the exchange rate changes, the core net profit amounted to RMB 1,925.1 million, representing a year-on-year increase of 134.8%.
- The core net profit attributable to the owners of the Company amounted to RMB 1,526.3 million, representing a year-on-year increase of 372.4%.
- The Group achieved contracted sales amount of approximately RMB 4,988.0 million with a contracted area of 91,317.8sq.m., up by 43.3% and 62.2% as compared with the corresponding period of last year, respectively
- The Group continuously endeavored to reduce its debt costs, and therefore decreased its average borrowing cost rate to 4.20% for the first half of 2018. The Group's leverage rate was kept in low level. The net debt rate was reduced by 2.1 ppt to 26.6% as compared with the corresponding period of last year. The cash held by the Group amounted to RMB 11,532.0 million with sufficient cash reserves
- Rental income of Joy City Shopping Malls increased by 7.0%, to RMB 1,240.0 million; Tenants sales increased by 10% to RMB 8,359.0 million, the averaged EBITDA to cost of operating Joy City malls is 8.9%.

During the reporting period, the profit of the Group amounted to RMB 2,262.1 million, representing a year-on-year increase of 61.3% of which, the profit attributable to the owners of the Company amounted to RMB 1,688.0 million, representing a year-on-year increase of 158.0%. Excluding the fair value changes after tax of investment properties and the exchange rate changes, the core net profit amounted to RMB 1,925.1 million, representing a year-on-year increase of 134.8%.The core net profit attributable to the owners of the Company amounted to RMB 1,526.3 million, representing a year-on-year increase of 372.4%.The Group achieved contracted sales amount of approximately RMB 4,988.0 million with a contracted area of 91,317.8sq.m., up by 43.3% and 62.2% as compared with the corresponding period of last year, respectively. The Group continuously endeavored to reduce its debt costs, and therefore for the first half of 2018, the average borrowing cost decreased by 0.08 ppt to 4.2% compared with 2017. The Group's leverage rate kept in low level, and the cash held by the Group amounted to RMB 11,532.0 million with sufficient cash reserves.

In the first half of 2018, the Group achieved stable performance for its four business segments, namely property investment, property development, hotel management, output management and other services. The operation efficiency of the Group was improved continuously, the gross profit rate of the each business sector increased rapidly, especially the Joy Cities' EBITDA, amounted to RMB 890.0 million, representing a year-on-year increase of 28.0%.

For investment properties business, during the period under review, the Group maintained steady operations in the investment properties business. The rents of Joy City saw a significant growth with a year-on-year increase of 6.6%, of which, Chengdu Joy City recorded a year-on-year increase of 24.7% in rents by optimizing the brand and expanding the customer base. Through the renovation and upgrade of Tower C, the rents of COFCO Plaza increased by 22.6% year-on-year. In addition, Chaoyang Joy City and Tianjin Joy City maintained their leading position in the industry with significant increase in rental income.

For property development business, during the period under review, the Group captured market opportunities and moved on such momentum to speed up the sales settlement cycle, further achieving the rapid growth in its sales performance. The Group recorded contracted sales amount of RMB 4,988.0 million from the property development, representing a year-on-year increase of 43.3%, and contracted area of 91,317.8sq.m, representing a year-on-year increase of 62.2%.

For hotel operation business, the Group's hotel business continued to enhance brand positioning, create hotel features, improve service quality, strengthen cost control and management, and enhance its operating efficiency. In particular, MGM Grand Sanya further reinforced its leading position in the industry with a year-on-year increase of 6.0% in average occupancy rate.

In the first half of 2018, against the backdrop of preventing and mitigating significant risks internally and responding to the China-U.S. trade conflict externally, holding properties, represented by commercial real estate, won the favor of developers as a new economic growth point and a safe haven for capital. As the development scale of commercial properties shrank and the demand for commercial development continued to rise, the overall rents of commercial properties in China increased in the first half of 2018. Below is the review of the different sub-sectors of the industry. In terms of the shopping mall market, shopping mall operators, with their deep understanding of the essence of experiential consumption, created new commercial models and enhanced customers' shopping experience while carrying out the deep integration of online and offline businesses with the use of the Internet and big data technologies, thereby comprehensively improving the efficiency, convenience and comfortableness of new retail. At the same time, customers set new requirements for shopping malls in respect of personalization, diversity and practicability. In terms of the office market, the overall rents of office buildings remained stable. With further diversification in the market of the main core cities, rents and sales in Beijing were remarkably higher than those of other cities. Meanwhile, office sharing continued to see rapid growth with its rents increasing at a higher rate than the traditional office market. In terms of the hotel market, it generally continued to pick up due to the factors such as the upgrade of consumption transformation and the improvement in operating capability.

Looking to the future, the Vice President of COFCO Group, the Chairman of Joy City Property Limited, Mr. Zhou Zheng said: "While the intensification of risk control and reform in China as well as the escalation of China-U.S. trade conflict will bring more instabilities to the macro economy. However, the fundamentals of the political and economic requirements for the growth in consumption and retail markets remain unchanged. It is expected that capital will generally further concentrate on quality commercial properties. At the same time, with the advancement in urbanization, quality consumption and commercial functions in city groups have been expanding out of core cities to second-tier core cities, thus creating bigger room for commercial development. Against such backdrop, the commercial market will focus on efficient, convenient and comfortable shopping experience in the future, as well as placing emphasis on business contents that are practical, non-luxurious and based on actual demand. The Group will further develop various solutions to accurately capture the demand of target customers with the use of the Internet, big data, artificial intelligence and other advanced means, so as to offer diversified shopping choices and service experience, create unique and differential commercial real estate products and enhance the user loyalty of target customers. The Group will adhere to innovation as it is the core growth driver for commercial property operators to achieve a rapid business growth by providing innovative experience, services and products to the market, enhancing the leading position in the industry".

About Joy City Property Limited
Joy City Property Limited (00207.HK) is the leading commercial property developer and operator of COFCO Group, focusing on the development, operation, sales, leasing and management of complexes and commercial properties in the PRC.

The group mainly engages in the development, operation and management of mixed-use complexes under the brand of Joy City, and owns projects include several Joy City complexes in Beijing, Shanghai and other tier 1 and tier 2 cities. The group also has prime investment properties strategically located in first-tier cities, including Beijing COFCO Plaza and Hong Kong COFCO Tower, as well as high quality properties held by the Group, namely Shanghai Joy City Joy mansion one. The Group operates a number of national high-end luxury hotels, including the St. Regis Sanya Yalong Bay Resort and MGM Grand Sanya. These high quality property projects are strategically located in central districts of first or key second tier cities with good investment and appreciation potentials.

Looking forward, the Group will maintain the two-wheel-drive business strategy of "holding and selling properties", the development strategy of "light and heavy asset", and establish the development model of "Joy City Asset Management" combined real estate with finance, enhancing product quality and cost-effectiveness, so as to create value for its customers, shareholders and partners. The group will inherit the ideals of "Sustain Operating for Centuries", and preserve with the "young, fashionable, trendy and quality" brand spirit of Joy City to lead the trend of new city lifestyle of China. It is a mission of the Group to assist in coordination among and development of cities in China and become a leading complex and commercial property developer in the PRC.


Topic: Press release summary
Sectors: Daily Finance, Daily News
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