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YANLORD HAS BEEN FOCUSING ON QUALITY OF PRODUCTS AND SERVICES TO MEET THE EVER-CHANGING AND EVOLVING NEEDS OF ITS CUSTOMERS, SO AS TO DISTINGUISH ITSELF FROM THE OTHER MARKET PLAYERS. YANLORD HAS BEEN KEEPING UP ITS REGIONAL INVESTMENT AND PRODUCT POSITIONING IN A RELATIVELY FOCUSED MANNER.
Through presenting the annual results of Yanlord Land Group Limited (“Yanlord” or “Company” and together with its subsidiaries, “Group”) for the financial year ended December 31, 2021 (“FY 2021”), I am pleased to share with shareholders of the Company the business strategies supporting the Group’s operating figures of FY 2021, as well as the future development direction of the Group.
Yanlord has been focusing on quality of products and services to meet the ever-changing and evolving needs of its customers, so as to distinguish itself from the other market players. Yanlord has been keeping up its regional investment and product positioning in a relatively focused manner. In Singapore, Yanlord, through its subsidiary, United Engineers Limited (“UEL” and together with its subsidiaries, “UEL Group”), holds a portfolio of high-quality commercial, office, serviced apartment and hotel properties, as well as residential developments in prime locations, expanding the Group’s long-term investment in Singapore. In the People’s Republic of China (“PRC”), Yanlord has continuously increased its investment in the Yangtze River Delta region, especially in Jiangsu province, being one of the major economic provinces of the country. Yanlord’s high-quality developments and premium services are highly sought after by homeowners looking to upgrade.
In 2021, Yanlord’s major new project launches and new batch releases for existing projects were relatively concentrated in the fourth quarter. Yanlord Arcadia in Shanghai first launched with a total of 299 high-rise apartment units, was fully sold out on the day of its inaugural launch in November 2021, garnering over RMB5.075 billion of property pre-sales. In addition, Yanlord’s projects in Hangzhou and Nanjing were also sold out on the respective day of launches. Launches in newly-entered cities, Shenyang and Wuxi, also recorded outstanding sales
performance compared to their peer-projects. Through these launches, Yanlord recorded strong sales performance in fourth quarter of 2021 with property contracted pre-sales reaching RMB22.817 billion amidst a relatively volatile market, an increase of 182.2% compared to the third quarter of 2021.
For FY 2021, the property contracted pre-sales of the Group together with its joint ventures and associates from residential and commercial units, and car parks was RMB59.587 billion on contracted gross floor area (“GFA”) of approximately 1.87 million square metres (“sqm”). In which, Yanlord’s residential developments in Singapore performed well with a sales contribution of close to SGD900 million (equivalent to approximately RMB4.334 billion), a testament to the well implementation of Yanlord’s strategic investment in Singapore. Together with the property contracted pre-sales of other property development projects under the Group’s project management business bearing the “Yanlord” brand name for FY 2021 of RMB18.126 billion on contracted GFA of 376,623 sqm, the total property contracted pre-sales for FY 2021 reached RMB77.713 billion on a total GFA of approximately 2.25 million sqm.
All four main business segments of Yanlord recorded revenue growth in FY 2021. The Group’s revenue in FY 2021 was RMB34.833 billion, an increase of 45.6% compared to the financial year ended December 31, 2020 (“FY 2020”), of
which, RMB31.035 billion was contributed from property development, RMB1.306 billion from property investment and hotel operations, RMB939 million from property management and the remaining RMB1.553 billion from other segments, representing an increase of 48.1%, 14.7%, 15.5% and 54.4% compared to FY 2020, respectively.
For FY 2021, the Group together with its joint ventures and associates delivered residential and commercial units with a total GFA of 2.06 million sqm and 10,510 units of carparks to its customers, an increase of 140.2% and 113.5% compared to FY 2020, setting a new record of total properties delivered in a year. The total gross revenue from property sales recognised for FY 2021 was RMB65.102 billion, an increase of 160.4% compared to FY 2020, of which, RMB31.077 billion was recognised as the gross revenue of the Group and RMB34.025 billion was recognised as the gross revenue of the joint ventures and associates.
Profit for the year of the Group in FY 2021 was RMB4.037 billion, an increase of 10.5% compared to FY 2020, mainly attributable to increase in gross profit and share of profit from joint ventures as well as decrease in finance cost, partly offset by decrease in other operating income and other gains and fair value gain on investment properties during FY 2021.
Yanlord has been managing its financial and liquidity prudently. As at December 31, 2021, the Group’s total assets increased by 5.4% to RMB154.448 billion; cash and cash equivalents increased by 25.3% to RMB21.552 billion with net gearing ratio decreased by 14.2 percentage points to 49.0%, compared to December 31, 2020.
For FY 2021, the total revenue from property investment and hotel operations of the Group increased by 14.7% to RMB1.306 billion over FY 2020. The increase was mainly attributable to the increase in income from hotel operations in Sanya and Zhuhai, as well as the completion of refurbishment works and re-opening of Yanlord Riverside Plaza (Phase 1) shopping mall in Tianjin. In Singapore, occupancy rates of UE BizHub CITY and UE BizHub TOWER continued to hold up well at around 90%, and UE BizHub CENTRAL and UE BizHub WEST achieved stable occupancies with positive rental reversion. Owing to long-lease business travellers and more multinational companies setting up operations in Singapore, serviced apartments at Park Avenue Clemenceau and Park Avenue Robertson performed well with occupancy rates retained around 85%. During the year, riding on the strength and management expertise of UEL Group’s “Park Avenue” serviced apartment brand, the Group launched the “ParcVue” brand name for its serviced apartment and hotel in the PRC, with its first opening in the Sino-Singapore Nanjing Eco Hi-tech Island. New series of product lines under this brand name are planned to be opened in Yancheng, Shenyang and Shanghai, creating synergistic effect with the property development business.
In addition to recurring income, the Group will consider refurbishing and re-developing its various freehold properties located in prime locations in Singapore to enhance their overall value. Over the past few years, Singapore’s centrally located freehold properties have become scarce in supply and have continued to rise in value, offering shareholders the potential for lucrative returns. At the same time, UEL Group’s non-property business located in various countries continued to develop in their respective fields and have posted business growth and profit in FY 2021.
Looking at the key operating data of the Group’s performance in the challenging year of 2021, Yanlord firmly believes that its focus strategy to concentrate on regional investment and high-end product positioning on the backdrop of the changing real estate market is a best fit, and will support the Group’s sustainable development, to realising brand appreciation and business development. On this basis, complemented by high-quality operating assets and long-term stable management services income, Yanlord can better navigate market risks and seize development opportunities.
In line with this strategic direction, in FY 2021, the Group together with its joint ventures and associates acquired a total of 12 new projects mainly located in Yangtze River Delta region, including Shanghai and Suzhou, as well as Wuxi and Yangzhou, being two newly-entered cities. As at December 31, 2021, the Group together with its joint ventures and associates held a total GFA of approximately 9.924 million sqm of landbank in the prime location in 20 high-growth cities located in the six major economic regions of PRC and in Singapore; of which, approximately 55.1% located in the Yangtze River Delta, and 18.0% in the Greater Bay Area.
Driven by urbanisation and economic globalisation, the real estate industry in the PRC has been developing rapidly for nearly 30 years, with per capita living area reaching 40 sqm. In light of the ongoing competition for quality resources allocation among cities, and people continuing to pursue development opportunities as part of the next stage of urbanisation, the prospect of the world’s most populous country remains considerable.
During the epidemic, the continued influx of people into the first and second-tier cities of PRC, Singapore and other developed regions with continued economic development shows that real estate demand remains keen and the upgrade-housing demand in the high-end market is a growth opportunity for real estate companies in the next phase.
Yanlord’s “quality product” positioning since its inception and its long-established product and service system, pragmatic management style, and solid cooperative partner style and customer base will continue to be its competitive edge to compete for future market opportunities. Yanlord will continue to maintain a prudent financial strategy and business policy to ensure its product quality and market competitiveness.
As at December 31, 2021, the Group together with its joint ventures and associates recorded an accumulated property contracted pre-sales of RMB98.219 billion on a total GFA of 2.9 million sqm, which are pending recognition in the first half of financial year ending December 31, 2022 and beyond. Following the strong market responses for Yanlord’s property pre-sales launched in late 2021, the Group continued to launch new developments for pre-sales in January 2022, including the inaugural launch of apartment units at Poetic Villa and the new batch launch of Yanlord Arcadia in Shanghai, garnering strong sales performance totalling RMB7.183 billion with all units launched sold on the day of launch for both projects. In January 2022, the Group together with its joint ventures and associates’ property contracted pre-sales amounting to RMB9.807 billion, an increase of 87.7% compared to January of 2021.
Barring any significant deterioration in the global economy and any other unforeseen circumstances, the board of directors of the Company (“Board”) is cautiously optimistic about the Group’s performance for the next reporting period and the next 12 months from the last reporting period based on the number of pre-sale units to-date, construction progress and delivery schedule.
The Board is recommending a final tax-exempt dividend of 6.8 Singapore cents (equivalent to approximately 32.75 Renminbi cents) per ordinary share of the Company in respect of FY 2021, representing a dividend payout ratio of 23.8% of FY 2021 profit attributable to owners of the Company. The dividend is subject to shareholders’ approval at the Company’s forthcoming Annual General Meeting scheduled to be held on April 28, 2022.
The management and I would like to express our appreciation to all our customers, business associates, employees and shareholders for their trust and continued support and to the Directors for their guidance and contribution to steer the Group through yet another challenging year.
Looking ahead, Yanlord will continue to build on its proven business strategies and endeavor to increase shareholder value through better operational and financial performance.