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Ying Li International Real Estate Ltd
(Company Registration No: 199106356W)
Financial Statement Announcement for 1st Quarter ended 31 March 2012
Part 1 - INFORMATION REQUIRED FOR ANNOUNCEMENTS OF QUARTERLY
(Q1, Q2 & Q3), HALF-YEAR AND FULL YEAR RESULTS
1(a) A statement of comprehensive income (for the group),
together with a comparative statement for the corresponding
period of the immediately preceding financial year.
The Board of Directors announces the unaudited results of the
Group for the 1st quarter and three months ended
31st March 2012.
Group
1st Qtr 1st Qtr Increase / (Decrease)
Jan to Mar Jan to Mar Increase / (Decrease)
2012 2011 2012 2011
RMB ('000) RMB ('000) % RMB ('000) RMB ('000) %
Revenue 121,021 30,060 302.6% 121,021 30,060 302.6% Cost of sales (70,509) (14,232) 395.4% (70,509) (14,232) 395.4% Gross profit 50,512 15,828 219.1% 50,512 15,828 219.1%
Other income 761 1,048 (27.4%) 761 1,048 (27.4%) Selling expenses (9,899) (2,761) 258.5% (9,899) (2,761) 258.5% Administrative expenses - Normal recurring (12,806) (13,230) (3.2%) (12,806) (13,230) (3.2%) Administrative expenses - Non-recurring (11,818) - n.m. (11,818) - n.m. Finance costs (8,022) (4,170) 92.4% (8,022) (4,170) 92.4% Profit/(Loss) before Income Tax 8,728 (3,285) (365.7%) 8,728 (3,285) (365.7%)
Taxation - Current (9,558) (2,468) 287.3% (9,558) (2,468) 287.3%
- Deferred 4,447 1,232 261.0% 4,447 1,232 261.0% Profit/(Loss) for the period 3,617 (4,521) (180.0%) 3,617 (4,521) (180.0%) Foreign currency translation differences(at nil tax) (28,018) (8,569) 227.0% (28,018) (8,569) 227.0% Total comprehensive income for the period (24,401) (13,090) 86.4% (24,401) (13,090) 86.4%
Profit/(Loss) attributable to:
Owners of the parent 5,540 (4,195) n.m. 5,540 (4,195) n.m. Non-Controlling Interest (NCI) (1,923) (326) 489.9% (1,923) (326) 489.9%
3,617 (4,521) n.m. 3,617 (4,521) n.m.
Total comprehensive income attributable to:
Owners of the parent (22,478) (12,764) 76.1% (22,478) (12,764) 76.1% Non-Controlling Interest (NCI) (1,923) (326) 489.9% (1,923) (326) 489.9% (24,401) (13,090) 86.4% (24,401) (13,090) 86.4%
n.m. - not meaningful
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1(b) A statement of financial position (for the issuer and group), together with a comparative statement as at the end of the immediately preceding financial year.
ASSETS
Group Company
31-Mar-12 31-Dec-11 31-Mar-12 31-Dec-11
RMB ('000) RMB ('000) RMB ('000) RMB ('000)
Non-current assets:
Property, plant and equipment 9,370 9,755 30 49
Investment in subsidiaries - - 2,827,186 2,827,186
Investment properties 2,561,414 2,571,700 - - Prepayment 1,083 1,208 - - Total non-current assets 2,571,867 2,582,663 2,827,216 2,827,235
Current assets:
Land for development 7,418 7,418 - - Development properties 2,910,908 2,830,149 91,805 72,584
Trade and other receivables 196,582 171,750 776 1,019
Amount due from subsidiaries - - 1,652,684 1,625,108
Cash and cash equivalents 285,073 342,845 29,428 25,775
Total current assets 3,399,981 3,352,162 1,774,693 1,724,486
Total assets 5,971,848 5,934,825 4,601,909 4,551,721
EQUITY AND LIABILITIES Capital and reserves:
Capital contribution 3,528,339 3,528,339 3,528,339 3,528,339
Reverse acquisition reserve (1,993,711) (1,993,711) - - Statutory common reserve 13,139 13,139 - - Convertible bonds (equity component) 49,444 49,444 49,444 49,444
Exchange flunctuation reserve 6,591 34,609 11,511 (12,484) Retained profits 1,195,676 1,190,136 (116,930) (109,514)
2,799,478 2,821,956 3,472,364 3,455,785
Non-Controlling Interest 53,124 55,048 - - Total equity 2,852,602 2,877,004 3,472,364 3,455,785
Non-current liabilities:
Deferred taxation 344,188 348,635 - - Other borrowings - unsecured 12,384 19,477 - - Convertible bonds (liability component) 983,182 951,366 983,182 951,366
Total non-current liabilities 1,339,754 1,319,478 983,182 951,366
Current liabilities:
Trade and other payables 652,010 664,164 4,270 3,196
Amount owing to subsidiaries - - 118,982 118,982
Provision for taxation 112,537 108,360 - - Other borrowings - unsecured 75,384 73,038 - - Bank borrowings - secured 939,561 892,781 23,111 22,392
Total current liabilities 1,779,492 1,738,343 146,363 144,570
Total equity and liabilities 5,971,848 5,934,825 4,601,909 4,551,721
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Notes to Statement of Financial Position
Trade and other receivables comprises of:
Group Company
31-Mar-12 31-Dec-11 31-Mar-12 31-Dec-11
RMB ('000) RMB ('000) RMB ('000) RMB ('000)
Trade receivables 159,346 128,653 - - Other receivables:
- Rental deposits 535 519 517 501
- Prepayments 6,101 4,095 201 244
- Staff advances and allowances 1,025 221 - -
- Advance to sub-contractors 14,670 24,260 - -
- Advance to management agents 3,600 3,600 - -
- Advance to legal services 500 500 - -
- Refundable deposits 9,398 8,322 - -
- Others 1,407 1,580 58 274
196,582 171,750 776 1,019
1(b)(ii) Aggregate amount of group's borrowings and debt securities
Group
31-Mar-12 31-Dec-11
Secured Unsecured Secured Unsecured
RMB ('000) RMB ('000) RMB ('000) RMB ('000)
Amount repayable in one year or less, or on demand
- Banks 939,561 - 892,781 -
- Others - 75,384 - 73,038
939,561 75,384 892,781 73,038
Amount repayable after one year - 995,566 - 970,843
939,561 1,070,950 892,781 1,043,881
Details of any collateral
Secured bank borrowings are generally secured against
Companies' construction-in-progress, investment
properties and cash deposit. Current bank borrowings have
repayment periods between 1 and 9 years from the balance
sheet date, and a repayable-upon-demand
clause in the loan agreement.
Of the RMB995.6 million unsecured borrowings, RMB983.2
million is related to the S$200 million 4% convertible bonds
(the "Bonds") issued on the 3rd March 2010, for
acquiring of new development sites, making potential
strategic investments and forming potential joint ventures.
The Bonds will mature on 3rd March 2015.
Utilization of proceeds which was announced as at 31 March
2012
Description | SGD (mil) | SGD (mil) |
Net proceeds | 191.82 | |
Repayment to Mr Fang Ming | 4.58 | |
Payment of the outstanding consideration and the lease tax in respect of the acquisition of the Da Ping Project land bank | 12.32 | |
Partial payment for the acquisition of the Wu Yi Road land parcel as announced | 120.00 | |
Payment for initial cost for Lu Zu Temple project | 6.00 | |
Payment for initial cost for Wei Yuan land parcel | 8.00 | |
Working capital | 1.00 | |
Total utilised | 151.90 | |
Balance to be utilised | 39.92 |
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1(c) A statement of cash flows (for the group), together with
a comparative statement for the corresponding period of the
immediately preceding financial year.
Group
1st Qtr 1st Qtr Jan to Mar Jan to Mar
2012 2011 2012 2011
RMB ('000) RMB ('000) RMB ('000) RMB
('000)
Operating activities
Profit/(Loss) before taxation 8,728 (3,285) 8,728 (3,285)
Adjustments for:
Depreciation of property, plant and equipment 522 509 522
509
Interest expense 8,022 4,170 8,022 4,170
Interest income (133) (388) (133) (388) Loss on disposal of
property, plant and equipment - 116 - 116
Unrealised exchange loss (2) (2,193) (2) (2,193) Operating
profit/(loss) before working capital charges 17,137 (1,071)
17,137 (1,071)
Decrease in investment properties 10,286 - 10,286 - Increase
in development properties (44,870) (63,720) (44,870) (63,720)
(Increase)/decrease in trade and other receivables (24,708)
6,597 (24,706) 6,597
Decrease in trade and other payables (17,641) (102,901)
(17,643) (102,901) Cash used in operations (59,796) (161,095)
(59,796) (161,095)
Interest paid (17,063) (15,636) (17,063) (15,636) Interest
received 133 388 133 388
Income tax paid (5,381) (25) (5,381) (25) Net cash used in
operating activities (82,107) (176,368) (82,107)
(176,368)
Cash flow from investing activities
Acquisition of property, plant and equipment (135) - (135) -
Proceed from disposal of property, plant and equipment -
6,567 - 6,567
Net cash (used in) / generated from investing activities
(135) 6,567 (135) 6,567
Cash flow from financing activities
Payment of interest expense on convertible bonds (20,102)
(20,628) (20,102) (20,628) Proceed from secured borrowings
66,481 74,000 66,481 74,000
Repayment of borrowings (28,120) (2,055) (28,120) (2,055) Net
cash generated from financing activities 18,259 51,317 18,259
51,317
Net decrease in cash and cash equivalent (63,983) (118,484)
(63,983) (118,484) Effects of exchange rate changes on cash
and cash equivalents 6,211 8,692 6,211 8,692
Cash and cash equivalent at beginning of period 342,845
596,139 342,845 596,139
Cash and cash equivalent at end of period 285,073 486,347
285,073 486,347
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1(d)(i) A statement (for the issuer and group) showing either
(i) all changes in equity or (ii) changes in equity other
than those arising from capitalisation issues and
distributions to shareholders, together with a comparative
statement for the corresponding period of the immediately
preceding financial year.
Consolidated Statement of Changes in Equity for the period
ended 31 March 2012
Group | Reverse Statutory Convertible Capital acquisition common bonds (equity Translation Retained contribution reserve reserve component) reserve profits RMB ('000) RMB ('000) RMB ('000) RMB ('000) RMB ('000) RMB ('000) | Total attributable to equity holders of the Parent RMB ('000) | Non- Controlling Interest RMB ('000) | Total RMB ('000) |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,528,339 (1,993,711) 13,139 49,444 34,609 1,190,135 - - - - (28,018) 5,541 | 2,821,955 (22,477) | 55,048 (1,924) | 2,877,003 (24,401) |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,528,339 (1,993,711) 13,139 49,444 6,591 1,195,676 | 2,799,478 | 53,124 | 2,852,602 |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,527,574 (1,993,711) 12,644 49,444 (12,818) 913,601 - - - - (8,569) (4,195) | 2,496,734 (12,764) | 54,048 (326) | 2,550,782 (13,090) |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,527,574 (1,993,711) 12,644 49,444 (21,387) 909,406 | 2,483,970 | 53,722 | 2,537,692 |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 |
Statement of Changes in Equity of the Company for the period ended 31 March 2012
Company | Convertible Capital bonds (equity Translation Retained contribution component) reserve profits RMB ('000) RMB ('000) RMB ('000) RMB ('000) | Total RMB ('000) |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,528,339 49,444 (12,484) (109,514) - - 23,995 (7,416) | 3,455,785 16,579 |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,528,339 49,444 11,511 (116,930) | 3,472,364 |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,527,574 49,444 25,626 (79,634) - - 12,509 (6,937) | 3,523,010 5,572 |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 | 3,527,574 49,444 38,135 (86,571) | 3,528,582 |
Balance at 1 January 2012 Total comprehensive income for the year Balance at 31 March 2012 Balance at 1 January 2011 Total comprehensive income for the year Balance at 31 March 2011 |
1(d)(ii) Details of any changes in the company's share
capital arising from rights issue, bonus issue, share
buy-backs, exercise of share options or warrants, conversion
of other issues of equity securities, issue of shares or cash
or as consideration for acquisition or for any other purpose
since the end of the previous period reported on. State also
the number of shares that may be issued on conversion of all
the outstanding convertibles as at the end of the current
financial period reported on and as at the end of the
corresponding period of the immediately preceding financial
year
There was no change in the Company's issued share capital
since the end of the previous period reported on. The number
of shares that may be issued on conversion of outstanding
Bonds at the end of the period:
As at 31 Mar 2012 | As at 31 Mar 2011 | |
No. of shares | No. of shares | |
The number of shares that may be issued on conversion of outstanding Bonds at the end of the period | 249,097,023 | 249,097,023 |
No Bonds has been converted since the date of issuance.
Except for the disclosure above, the Company had no other
outstanding convertibles as at 31 March 2012 and as at 31
March 2011.
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1(d)(iii) To show the total number of issued shares excluding
treasury shares as at the end of the current financial period
and as at the end of the immediately preceding year.
The total number of issued shares as at 31 March 2012 was
2,162,946,974. (31 December 2011: 2,162,946,974).
1(d)(iv) A statement showing all sales, transfer, disposal,
cancellation and/or use of treasury shares as at the end of
the current financial period reported on.
The Company did not hold any treasury shares as at 31 March
2012 and 31 December 2011.
2 Whether the figures have been audited or reviewed, and in
accordance with which auditing standard or practice.
The figures have not been audited or reviewed by the
auditors.
3 Where the figures have been audited or reviewed, the
auditors' report (including any qualifications or
emphasis of a matter).
Not Applicable.
4 Whether the same accounting policies and methods of
computation as in the issuer's most recently audited
annual financial statements have been applied.
The Group had adopted the same accounting policies and method
of computation in the financial statements for the current
financial period compared to the audited financial statements
for the year ended 31 December 2011.
5 If there are any changes in the accounting policies and
methods of computation, including any required by an
accounting standard, what has changed, as well as the reasons
for, and the effect of, the change.
Not Applicable.
6 Earnings per ordinary share of the group for the current
financial period reported on and the corresponding period of
the immediately preceding financial year, after deducting any
provision for preference dividends:-
(a) Based on the weighted average number of ordinary shares
on issue; and
(b) On a fully diluted basis (detailing any adjustments made
to the earnings).
Earnings per ordinary share:
Group
1st Qtr 1st Qtr Jan to Mar Jan to Mar
2012 2011 2012 2011
(i) Based on weighted average no. of
ordinary shares in issue (RMB per share) 0.003 (0.002) 0.003 (0.002) (ii) On a fully diluted basis (RMB per share)* 0.003 (0.002) 0.003 (0.002) Number of shares in issue:
(i) Based on weighted ave no. of
ordinary shares in issue ('000) 2,162,947 2,162,492 2,162,947 2,162,492 (ii) On a fully diluted basis ('000) 2,412,044 2,411,589 2,412,044 2,411,589
* Diluted earnings per ordinary share have not been computed as it is anti-dilutive.
Earnings per ordinary share equals to the Group's profit for
the financial periods attributable to the shareholders of the
Company divided by the weighted average number of ordinary
shares issued during the period under review.
Diluted earnings per ordinary share is calculated based on
the similar basis as the earnings per share, except by
applying weighted average number of ordinary shares and the
number of shares deemed issued upon conversion of the
outstanding convertible bonds in the respective reporting
periods.
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The following table indicates the profit / (loss) and share numbers used in the basic and dilution earning per share computations:
1st Qtr 1st Qtr Jan to Mar Jan to Mar
2012 2011 2012 2011
Profit attributable to equity holders of the parent 5,540 (4,195) 5,540 (4,195) Less: Effect of dilutive potential ordinary shares
- Interest on Convertible bonds 4,244 4,170 4,244 4,170
9,784 (25) 9,784 (25)
Weighted average number of ordinary shares in issued 2,162,947 2,162,492 2,162,947 2,162,492
Add: Effect of dilutive potential ordinary shares
- Convertible bonds 249,097 249,097 249,097 249,097
Number of ordinary shares used to calculate the diluted earning per share 2,412,044 2,411,589 2,412,044 2,411,589
7 Net asset value (for the issuer and group) per ordinary
share based on issued share capital of the issuer at the end
of the:- (a) current financial period reported on; and
(b) immediately preceding financial year.
Group Company
31 Mar 2012 31 Dec 2011 31 Mar 2012 31 Dec 2011
Net Assets Value (RMB'000) 2,799,478 2,821,956 3,472,364 3,455,785
Based on existing issued share capital (RMB per share) 1.29 1.30 1.61 1.60
Net Assets Value has been computed based on the
number of share issued (000') 2,162,947 2,162,947 2,162,947 2,162,947
8 A review of the performance of the group, to the extent
necessary for a reasonable understanding of the group's
business. It must include a discussion of the following:-
(a) any significant factors that affected the turnover,
costs, and earnings of the group for the current financial
period reported on, including (where applicable) seasonal or
cyclical factors; and
(b) any material factors that affected the cash flow, working
capital, assets or liabilities of the group during the
current financial period reported on.
STATEMENT OF COMPREHENSIVE INCOME
Due to the nature of our industry, recognition of properties
sales is driven by project hand-over. Consequently, quarterly
results may not be a good indication of profitability trend.
Revenue 1st Qtr 1st Qtr
2012 2011
Group
Increase / (Decrease)
Jan to Mar Jan to Mar
2012 2011
Increase / (Decrease)
RMB ('000) RMB ('000) % RMB ('000) RMB ('000) %
Sale of Properties 107,615 18,869 470.3% 107,615 18,869 470.3% Rental Income 13,406 11,191 19.8% 13,406 11,191 19.8%
121,021 30,060302.6% 121,021 30,060302.6%
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For the three months and quarter ended 31 March 2012
Group Revenue for 1Q 2012 increased by RMB91.0 million
(302.6%) to RMB121.0 million as compared with same period
last year. This was mainly due to higher revenue recorded
under Sale of Properties segment. Compared with the same
period last year, Revenue for the Group Sale of Properties
increased by RMB88.8 million (470.3%) to RMB107.6 million,
primarily from the sale of IFC office units. Rental income
for the Group increased by RMB2.2 million (19.8%) to RMB13.4
million, mainly from IFC, though most of the areas leased
were in the rent free period, and increased in annual rental
rates.
Group
Gross profit 1st Qtr 1st Qtr Jan to Mar Jan to Mar
2012 2011 2012 2011
RMB ('000) RMB ('000) % RMB ('000) RMB
('000) %
Sale of Properties 40,771 8,043 406.9% 40,771 8,043 406.9%
Rental Income 9,741 7,785 25.1% 9,741 7,785 25.1%
50,512 15,828 219.1% 50,512 15,828 219.1%
The Group's gross profit for 1Q 2012 increased by RMB34.7
million (219.1%) to RMB50.5 million as compared with the same
period last year. This was mainly due to higher sales
achieved from the Sale of Properties segment.
Gross profit from the Sale of Properties segment for 1Q 2012
increased by RMB32.7 million (406.9%) to RMB40.8 million. The
increase was mainly due to sales of IFC office units.
Gross profit from rental income for 1Q 2012 increased by
RMB2.0 million (25.1%) to RMB9.7 million. The increase was
mainly due to contribution from IFC.
Gross profit and margin
1st Qtr
Group
1st Qtr Jan to Mar
Jan to Mar
2012
2011
2012
2011
RMB ('000) % RMB ('000) % RMB ('000) % RMB ('000) %
Sale of Properties | 40,771 | 37.9% | 8,043 | 42.6% | 40,771 | 37.9% | 8,043 | 42.6% |
Rental Income | 9,741 | 72.7% | 7,785 | 69.6% | 9,741 | 72.7% | 7,785 | 69.6% |
50,512 | 41.7% | 15,828 | 52.7% | 50,512 | 41.7% | 15,828 | 52.7% |
The Group's gross profit margin for 1Q 2012 decreased by 11
percentage points to 41.7%. This is due to higher Land
Appreciation Tax
("LAT") rate applicable for IFC office units.
The gross profit margin for Rental income increased by 3.1
percentage points was due to higher margin contributed from
the IFC mall.
Other income
Group
1st Qtr 1st Qtr Jan to Mar Jan to Mar
2012 2011 2012 2011
RMB ('000) RMB ('000) RMB ('000) RMB ('000)
Subletting fee 268 282 268 282
Interest income 133 388 133 388
Advertisement income 281 80 281 80
Short term rental income 74 288 74 288
Others 5 10 5 10
761 1,048 761 1,048
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Selling expenses
During the quarter under review, Selling expenses was RMB7.1 million (258.5%) higher as compared to 1Q 2011. The increase was mainly due to higher and new advertising, sale and marketing cost incurred for IFC and Ying Li International Plaza respectively, as well as new operating expenses of IFC mall such as renovation, utilities and staff cost.
Administrative expenses
During the quarter under review, normal recurring administration expenses was RMB0.4 million (3.2%) lower as compared to 1Q 2011. However, there was a non-recurring administrative expenses of RMB11.8 million in 1Q 2012, due to the demolition charge incurred at Sanyawan in anticipation of the change in allowable land usage. This demolition had resulted in a dropped in short term rental income for the quarter under review from RMB288k to RMB74k as compared to 1Q 2011.
Finance costs
During the current quarter under review, finance expenses was
RMB3.9 million (92.4%) higher as compared to 1Q 2011. The
increase was mainly due increase borrowings, include drawdown
of construction loans for Ying Li International Plaza.
Taxation
Group
1st Qtr 1st Qtr Jan to Mar Jan to Mar
2012 2011 2012 2011
RMB ('000) RMB ('000) % RMB ('000) RMB
('000) %
Income tax (9,558) (2,468) 287.3% (9,558) (2,468) 287.3%
Deferred tax 4,447 1,232 261.0% 4,447 1,232 261.0% (5,111)
(1,236) 313.5% (5,111) (1,236) 313.5%
During the quarter under review, current income tax expense
increased by RMB7.1 million (287.3%) to RMB9.6 million as
compared with
1Q 2011 mainly due to higher taxable profit generated from
the Sale of Properties.
Profit/(Loss) attributable to owners of the parent
Group
1st Qtr | 1st Qtr | Increase / | Jan to Mar | Jan to Mar | Increase / |
2012 | 2011 | (Decrease) | 2012 | 2011 | (Decrease) |
RMB ('000) | RMB ('000) | % | RMB ('000) | RMB ('000) | % |
Profit attributable to:
Owners of the parent 5,540 (4,195) n.m. 5,540 (4,195) n.m.
Non-Controlling Interest (NCI) (1,923) (326) 489.9% (1,923) (326) 489.9%
3,617 (4,521)n.m. 3,617 (4,521)n.m.
n.m. - not meaningful
Overall, net profit attributable to the Owners of the parent
was RMB5.5 million, a reversal from loss of RMB4.2 million in
1Q 2011.
STATEMENT OF FINANCIAL POSITION
The Group total assets increased by RMB37.0 million to
RMB5,971.8 million during the quarter under review. The
increase was mainly due to: (i) development cost incurred for
Ying Li International Plaza, Wu Yi Road and IFC of RMB80.8
million and (ii) increase in trade and other receivable of
RMB24.8 million due to the sale of IFC office units and
prepayment of Land Appreciation Tax and reversal of advance
payment to sub-contractors. These were offset by: (i) the
demolition of structure at Sanyawan in anticipation of the
change in allowable land usage; (ii) amortization of long
term prepayment expense and depreciation charge of RMB0.6
million; and (iii) cash usage.
The Group total liabilities increased by RMB61.4 million to
RMB3,119.2 million during the quarter under review. The
increase was mainly due to: (i) net borrowings of RMB42.0
million which make up of new borrowings for Ying Li
International Plaza project and repayment of other
borrowings; and (ii) liability component of the convertible
bonds of RMB31.8 million. These were offset by a decrease in
trade and other payables, and taxation of RMB12.4 million.
Page 10 of 11
The Group total equity decreased by RMB24.4 million to
RMB2,852.6 million during the quarter under review. The net
decrease was due to translation losses, losses attributable
to Non-Controlling Interest and cushioned by profit achieved
for the current quarter under review.
STATEMENT OF CASH FLOW
The decreased in cash and cash equivalent of RMB64.0 million
for the quarter under review was mainly due to: (i) net cash
outflow of RMB82.1 million from operating activities;
(ii) cash outflow of RMB0.1 million from investing
activities; and
(iii) net cash inflow of RMB18.3 million from financing
activities.
The net cash used in operating activities of RMB82.1 million
include cash generated from operating profit of RMB28.9
million, plus sales and pre-sales proceeds, and trade
receivables collected from IFC and Ying Li International
Plaza amounting to RMB159.9 million, offset by (i) RMB44.9
million development cost incurred mainly at IFC and Ying Li
International Plaza amounting; (ii) net increase in working
capital such as trade receivables/payables and others by
RMB203.7 million; and (iii) interest and income tax payment
of RMB22.3 million.
Cash used in investing activities of RMB0.1 million was for
the purchase of property, plant and equipment.
Net cash generated from financing activities of RMB18.3
million mainly include: (i) increase in borrowing by RMB66.5
million for the development cost of Ying Li International
Plaza project; offset by (ii) payment of convertible bonds
interest of RMB20.1 million; and (iii) repayment of
borrowings amounting to RMB28.1 million.
9 Where a forecast, or a prospect statement, has been
previously disclosed to shareholders, any variance between it
and the actual results.
In line with the Group's announcement made on 27 February
2012 with respect to the 4Q2011 results announcement, the
Directors expect the Group to remain profitable in FY
2012.
10 A commentary at the date of the announcement of the
significant trends and competitive conditions of the industry
in which the group operates and any known factors or events
that may affect the group in the next reporting period and
the next 12 months.
According to the latest Chongqing Statistics Bureau and NSB
(National Statistic Bureau), Chongqing's nominal GDP reached
RMB 253.39 billion in the first quarter of 2012, an increase
of 14.4% year-on-year. The strong growth rate was the third
fastest recorded among all cities in China and was 6.3
percentage points higher than the national average.
Chongqing Commerce Commission announced that Chongqing 1Q
2012 total retail sales of consumer goods grew the fastest
nationwide to achieve RMB 97.26 billion or 16.7%
year-on-year, 1.9 percentage point higher than the national
average. Total import and export volume reached RMB 8.99
billion, up 120% year-on-year, the fastest growth rate in
China.
Despite the recent reshuffling of Chongqing's party
secretary, many foreign and local enterprises expressed their
optimism over Chongqing's local economic prospects. Based on
reports from China Daily, various International companies,
including Hewlett-Parkard (HP), PayPal, TNT Express and
Foxconn consider Chongqing as a strategic location for its
China business operations and have expressed their
willingness to continue investing in the city. Acer plans to
make its base in Chongqing the world's largest communication
technology research and manufacturing centre in two to three
years. Aktis Group, an investment management group with
interests in Chongqing says it is undeterred on the current
political change and will continue to invest aggressively in
the central mainland city. In 1Q 2012, Foreign Direct
Investment into Chongqing increased 38.6% year-on-year to USD
1.77 billion.
Foreign companies operating in Chongqing said business was so
far unaffected. Vice Premier Zhang Dejiang, whom replaced Mr.
Bo Xilai as Chongqing's new party secretary, affirmed that
Chongqing would ensure "continuity and stability" in its
reform and opening-up policies. Mr. Zhang, who holds an
economics degree, became a member of the Political Bureau of
the CPC Central Committee in 2002 and began serving as vice
premier of the State Council, China's Cabinet, from 2008. Mr.
Zhang had previously served as Party Secretary in Jilin,
Zhejiang and Guangdong provinces between 1995 and 2007. In
2011, Jilin, Zhejiang and Guangdong provinces were ranked
21st, 4th and
1st respectively in terms of GDP size in
China.
During a meeting with representatives of Hong Kong based
Wharf (Holdings) Limited, Mr. Zhang said the city will
further improve its policies to optimize the investment
environment and improve its service level so as to create
more favourable conditions for overseas companies investing
in Chongqing. Mr. Zhang also met with Prince Alwaleed bin
Talal Alsaud, Chairman of Saudi Arabian Basic Industries
Corporation, further emphasized that Chongqing's development
is at a critical stage and will continue to promote
opening-up policies and improve its business environment to
attract foreign investments.
According to Vice-Premier Li Keqiang and a Ministry of
Commerce think tank report, expanding domestic consumption is
a strategic point for China's economic growth in 2012. The
Chinese government plans to continue initiating policies to
spur domestic consumption
Page 11 of 11
demand, increase household incomes and control inflation. In
the China Real Estate Report Q2 2012 by Business Monitor
International, retail rates remain robust which in turn
support the industrial growth.
The Group continues to be optimistic on the outlook for
Chongqing's commercial real estate sector. According to the
latest DTZ Chongqing property report, Grade A office
Availability ratio decreased 2.19 percentage points with
rental rates increasing 3.08 percentage points. Also, grade A
office average prices increased 2.3 percentage points to
reach RMB 27,000 per square metre. Chongqing's retail market
absorption continues to be positive with more global
retailers extending their footprint in the city. CBRE
reported that vacancy rate of Chongqing retail property
market dropped by 1.1 percentage points to 8.5%.
Given that the Group focuses on development of commercial
properties, the Group believes it will continue to benefit
from these positive trends.
Barring any unforeseen circumstances, the Directors expect
the Group to remain profitable in 2012.
11 Dividend
(a) Current Financial Period Reported On
Any dividend declared for the current financial period
reported on?
No dividend was declared or recommended.
(b) Corresponding Period of the Immediately Preceding
Financial year
Any dividend declared for the corresponding period of the
immediately preceding financial year?
No dividend has been declared or recommended
(c) Date payable
Not Applicable.
(d) Books closure date
Not Applicable.
12 If no dividend has been declared/recommended, a statement
to that effect.
No dividend has been declared or recommended for the
period.
13 If the Group has obtained a general mandate from
shareholders for IPTs, the aggregate value of such
transactions as required under
Rule 920(1)(a)(ii). If no IPT mandate has been obtained, a
statement to that effect
The Group has not obtained a general mandate from
shareholders for IPTs.
14 Negative assurance confirmation on interim financial
results under SGX Listing Rule 705(5) of the Listing
Manual
The Directors confirm that, to the best of their knowledge,
nothing has come to the attention of the Board of Directors
of the Company which may render the financial results of the
Company for the financial period ended 31 March 2012 to be
false or misleading in any material aspect.
BY ORDER OF THE BOARD
Fang Ming Yang Xiao Yu
Chairman and CEO Executive Director
14 May 2012
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