Yuzhou Properties : A Rising Player in Yangtze River CIMB raises Yuzhou Properties (01628.HK) Target Price to HKD5.48 with BUY Rating

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A Rising Player in Yangtze River CIMB raises Yuzhou Properties (01628.HK) Target Price to HKD5.48 with BUY Rating

(29 Nov 2017, Hong Kong) One of China's top 40 real estate enterprises, Yuzhou Properties Company Limited ("Yuzhou Properties" or the "Company", together with its subsidiaries referred to as the "Group"; stock code: 01628.HK) proves itself a rising player in Yangtze River and its target price is raised by CIMB to HKD5.48 with BUY rating.

Becoming a Major Player in YRD

Since the strategic move to YRD in 2016, Yuzhou Properties has been trying to make its mark in core cities in YRD, including Hanghzou, Suzhou, Nanjing and Shanghai, through better product quality and high-end orientation. During the visit in Hanghzou, Suzhou and Shanghai, CIMB observed that local governments have implemented a series of preferential policies to lure talents, including home purchase and rental subsidies. Population influx and real estate demand is robust in the long run. CIMB believes the business focus in YRD will benefit Yuzhou Properties in terms of investment value, branding and geographic presence.

Aim to Achieve Rmb100billion Plus Sales in 2020

In 10M17, Yuzhou Properties has achieved contracted sales of Rmb32.4billion, up 59.1%, completing 81% of 2017 full year target of Rmb40billion (previous target: Rmb30billion). Corresponding ASP was up 35.7% to Rmb17,101/sq.m. Although price cap and property- purchasing limitation in core cities has dragged down the Company's maximum achievable sales, profitability and sell-through rate remain at reasonable level. Yuzhou Properties has established a sophisticated management structure to accelerate its M&A process. M&A has become the other major channel to acquire land. As of 30 Oct. 2017, the Company's land bank amounted to 10.7mn sq.m, of which 54% located in YRD and 33% in West Strait Region. With the enlarging business scale, Yuzhou Properties aims to achieve Rmb100billion plus sales in 2020.

Healthy Financial Status

As of 30 Jun 2017, the Company's cash on hand was Rmb19,604million, while current debt totaled to Rmb5,387million. Yuzhou further lowered its costs of debts to 5.99% as of 30 Jun 2016 (end-16FY: 6.08%). In September 2017, Yuzhou Properties issued 350 million new shares at a price of HK$4.53 each. Raised fund amounted to HK$1,586mn. CIMB believes the placement could enhance the liquidity of the Company's stock and lower the Company's gearing.

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Yuzhou Properties Company Limited (01628.HK)

Established in 1994, Yuzhou Properties is a property developer headquartered in Shanghai with a national foothold. Adhering to its strategy of Cultivating in Regions Leading the Market, Yuzhou Properties strives to develop residential and commercial properties which align with market trends in first-and second-tier cities. As at 30 September 2017, the Company had 79 projects under various stages of development in Xiamen, Fuzhou, Shanghai, Tianjin, Nanjing, Hefei, Hangzhou, Suzhou, Yangzhou, Quanzhou, Zhangzhou, Longyan, Bengbu, Huizhou and Hong Kong. It had a over 10.49 million sq.m. in aggregate GFA under development or held for future development, with Yangtze River Delta Region, West Strait Economic Zone, Bohai Rim Region and Central Region accounting of 53%, 33%, 6%, 6% and 2% respectively, of the total. Renowned for its outstanding product quality, diversified product portfolio, strong brand awareness and seasoned management team, Yuzhou Properties has been named "Top 100 China Real Estate Enterprises" for eleven years in a row; and Top 50 China Real Estate Enterprises from 2011 to 2017.

For more information about Yuzhou Properties, please visit the Company's website: http://www.yuzhou-group.com.

For inquiries, please contact:

Yuzhou Properties Company Limited (HKEX: 01628)

Head / Senior Manager / Senior Manager/ Manager / Assistant Manager of Corporate Finance & Investor Relations

Camille Xiong/ Shikai Wu/ Summer Guo/ Christine Huang/ Jessica Li Tel: [phone]

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Media enquires:

Wonderful Sky Financial Group Holdings Limited (HKEX: 01260) Iris Au Yeung/ Mel Lai

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