CentraLand Limited 3Q2010 (3rd Quarter) Results Presentation

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CentraLand Limited 3Q2010 (3rd Quarter) Results Presentation

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CentraLand Limited 3Q2010 (3rd Quarter) Results Presentation

  1. 1. CentraLand Limited CENTRALAND LIMITED 3Q2010 Results Presentation
  2. 2. CENTRALAND LIMITED 2 Contents Company Portfolio Financial Review Corporate Update Commercial Projects Residential Project Appendix – Overview of Zhengzhou
  3. 3. CENTRALAND LIMITED 3 Company Overview
  4. 4. CENTRALAND LIMITED 4 Business acquired by present management in November 2003 Focus on specialty wholesale trading hubs Listed on the SGX Mainboard on Feb 1, 2008 Completed aggregate GFA of 226,718 sq m of commercial / residential space Planned estimated GFA of additional 862,092 sq m to be completed by 2015 A Leading Zhengzhou-Based Property Developer and Property Manager Listing SGX Mainboard Issued Share Capital 1,845,000,000 Free Float 13.3% Share Price (As at Nov 8, 2010) S$0.450 Market Capitalisation (As at Nov 8, 2010) S$830.25 mil Net Asset Value Per Share (Sep 30, 2010) 78.00 RMB cents Major Shareholders Ember Vision (Mr Li Wei & Mr Wang Peng) – 48.6% Marble Focus (Mr Yan Tao) – 20.8% CIM X Limited – 8.7%
  5. 5. CENTRALAND LIMITED 5 Our Portfolio (Geographical location) J-Expo 1 & 2 Small consumer goods wholesale mall Tianrong Project Fashion apparel wholesale trading hub Jiancaigang Wholesale mall for automobile parts and building materials Property management services Nongye Road Project Mixed use development: retail and residential Border of old city centre and new CBD Guoling Shanshui High-end, integrated residential development 25 km or 20 mins drive from Zhengzhou City centre; 5 km south of Yellow River, where the Yellow River Scenic Area is located Guoling Shanshui Tianrong Zhengdong New CBD J-Expo I & II Nongye Road Jiancai Gang N
  6. 6. CENTRALAND LIMITED 6 Our Portfolio Land Bank/ Site Area (sq m) Saleable/Leasable Estimated GFA (sq m) Remarks Completed property Commercial property J-Expo 1 ( 1) 9,771 65,890 Sold and delivered 76.7% of saleable GFA (As at 30 Sep 2010) Property under development Estimated Construction Schedule Residential property Phase III of Guoling Shanshui ( ) Remaining land bank at Guoling Shanshui 174,412 1.5 mil 132,763 TBA 2Q 2009 – 4Q 2012 -- New projects Commercial properties J-Expo 2 ( 2) 9,000 93,000 4Q 2010 – 1Q 2012 Tianrong Fashion City ( ) Old Residential Area, adjacent to Tianrong Fashion City ( ) 24,0261 16,7922 553,0003 1Q 2011 – 4Q 2015 Mixed residential & commercial property Nongye Road Project ( ) 16,123 100,092 4Q 2010 – 3Q 2012 Property Management Jiancai Gang ( ) 758,574 354,568 Tenure of 20 years: 11 Nov 2009 – 30 Jun 2028 1 Entered into a sale and purchase agreement to acquire land occupying 15,081 sq m; acquired the balance 12,109 sq m in 2Q 2010 2 Acquisition expected to take place in 4Q 2010 3 Based on amalgamated site area of Tianrong Fashion City and Old Residential Area
  7. 7. CENTRALAND LIMITED 7 Financial Review
  8. 8. CENTRALAND LIMITED 8 Income Statement RMB ’mil 3Q2010 3Q2009 Change Revenue 23.5 18.3 + 28.0% Gross Profit 15.9 12.6 + 26.5% Other Income 0.5 1.2 - 60.2% Profit Before Tax 2.1 6.0 - 65.2% Net Profit 1.5 2.3 - 35.4% Selling Expenses 1.2 1.2 + 4.8% Admin Expenses 8.0 5.2 + 52.2% Effective Tax Rate 28.8% 61.7% - 34.5 ppt Gross Profit Margin 67.8% 68.7% - 0.9 ppt Profit Before Tax Margin 8.9% 32.8% - 23.9 ppt Net Profit Margin 6.3% 12.6% - 6.3 ppt 3Q: Three months ended 30 September
  9. 9. CENTRALAND LIMITED 9 18.3 23.5 0.0 10.0 20.0 30.0 40.0 3Q2009 3Q2010 Revenue Revenue 3Q2010 vs 3Q2009 Revenue increased from RMB18.3 mil in 3Q2009 to RMB23.5 mil in 3Q2010 No sales of properties in 3Q2010 RMB16.9 mil contributed from rental income and RMB6.5 mil from property management fee Rental income increased from RMB6.5 mil in 3Q2009 to RMB16.9 mil in 3Q2010 Sub-leasing of space within Jiancaigang Property management fee contribution of RMB6.5 million 3Q: Three months ended 30 September RMB’mil
  10. 10. CENTRALAND LIMITED 10 Revenue Breakdown Property Management Fees 27.9% Rental Income 35.4% J-Expo 1 Retail Units 64.6% 3Q2009 3Q2010 Rental Income 72.1% 3Q: Three months ended 30 September
  11. 11. CENTRALAND LIMITED 11 Gross Profit, PBT & Net Profit RMB’mil Gross Profit Increased from RMB12.6 million in 3Q2009 to RMB15.9 mil in 3Q2010 GP margin remained at 68% PBT Decreased to RMB2.1 mil in 3Q2010 Net Profit Decreased to RMB1.5 mil in 3Q2010 Effective tax rate of 28.8% in 3Q2010 3Q: Three months ended 30 September
  12. 12. CENTRALAND LIMITED 12 * Based on post-Invitation share capital of 1,845,000,000 Shares Balance Sheet Highlights RMB’mil As at 30 Sep 2010 As at 31 Dec 2009 Cash & Bank Balances 609.8 938.9 Net Assets 1,439.2 1,383.2 - Properties Held for Development 1,474.7 783.6 - Properties Held Under Development 234.0 138.9 - Properties Held for Sale 69.1 70.7 - Deposits Paid 150.0 120.0 Receipts in Advance (222.0) (46.3) Interest-bearing Bank & Other Borrowings (687.4) (617.0) Net Gearing Ratio (times) 0.05 Net cash NAV per Share (RMB cents) * 78.00 74.97
  13. 13. CENTRALAND LIMITED 13 Income Statement RMB ’mil 9M2010 9M2009 Change Revenue 84.4 102.7 - 17.9% Gross Profit 56.6 61.7 - 8.3% Other Income 1.8 2.3 - 23.7% Profit Before Tax 7.3 33.6 - 78.2% Net Profit 5.6 12.3 - 54.6% Selling Expenses 5.1 5.3 - 3.9% Admin Expenses 34.1 21.6 + 58.1% Effective Tax Rate 23.6% 63.2% - 32.9 ppt Gross Profit Margin 67.1% 60.1% - 8.6 ppt Profit Before Tax Margin 8.7% 32.7% - 21.2 ppt Net Profit Margin 6.6% 12.0% - 5.4 ppt 9M: Nine months ended 30 September
  14. 14. CENTRALAND LIMITED 14 Corporate Update
  15. 15. CENTRALAND LIMITED 15 Strategic Partnership with Warburg Pincus Endorsement of CentraLand’s strategic focus and competency in wholesale mall development Strengthens confidence and ability to execute its commercial projects Framework Agreement with Warburg Pincus on 30 September 2010 Warburg Pincus, a leading global private equity investor, to invest RMB650 million For a 31.71% equity interest each in two project companies that hold Tianrong Project and J-Expo 2 Project respectively Jointly collaborate in the development, construction, operation and management of the two projects Explore investment opportunities within PRC’s commercial real estate sector Including Jiancaigang, a wholesale mall for automobile parts and building materials (subject to CentraLand’s proposed acquisition) Potentially participate in Warburg Pincus’ existing wholesale assets portfolio in China (subject to conditions) Option for Warburg Pincus to invest up to an additional RMB650 million (subject to conditions)
  16. 16. CENTRALAND LIMITED 16 Strengthens financial position Demonstrates Warburg Pincus’ commitment to invest in China’s retail and wholesale sectors Strategic Partnership with Warburg Pincus Framework Agreement with Warburg Pincus on 30 September 2010 Considerably strengthen overall financial position to execute business plans for the two wholesale mall projects Heralds the beginning of a long symbiotic relationship Cross-share expertise and potential participation in Warburg Pincus’ wholesale assets portfolio To seek the necessary shareholders approvals A circular to Shareholders containing further information as well as a notice of the Special General Meeting will be dispatched to Shareholders in due course
  17. 17. CENTRALAND LIMITED 17 Commercial Projects
  18. 18. CENTRALAND LIMITED 18 J-Expo 1 ( • 1)
  19. 19. CENTRALAND LIMITED 19 Status of J-Expo 1 ( • 1) As at 30 September 2010 *302 units of the unsold units on level 4 and 5 were rented out as at 30 June 2010. Levels Completion Date Total Saleable GFA (sq m) Units No of Units Sold* No of Units Delivered* % of GFA Sold & Delivered Average ASP/unit (RMB/sqm) B1, L1-L3 2Q 2008 36,282 1,792 retail units 1,691 1,679 17,132 L4-L5 2Q 2008 18,297 768* retail units 464 451 11,379 L6-L12 2Q 2008 11,311 192 office units 147 147 6,113 Total 65,890 2,560 retail units/192 office units 76.7% (50,555 sq m) 14,226 23.3% GFA for lease 76.7% GFA sold
  20. 20. CENTRALAND LIMITED 20 J-Expo 2 ( • 2 ) Rate of registration of interest: 287.4% Expected start of construction: 4Q 2010 Expected completion: 1Q 2012 J-Expo 2 soft launch closed (on 25 October 2010) with a 287.4% rate of registration of interest • The Group received 7,184 down-payments to ballot for J-Expo II’s 2,500 retail units • Pre-sales expected to start in second quarter of 2011 J-Expo II J-Expo I
  21. 21. CENTRALAND LIMITED 21 Tianrong Project Zhengzhou Railway Station Zhengzhou Long Distance Bus Station J-Expo I J-Expo II Acquisition of J-Expo 2 site located in Erqi District ( ) for RMB150 mil In response to strong market demand following success of J-Expo 1 Total site area: 9,000 sq m Adjacent to existing J-Expo 1 Strategic location Within walking distance to Zhengzhou Railway station and Zhengzhou Long Distance Central Bus Station Located within the main wholesale centre of Zhengzhou City Planned total leasable GFA of 93,000 sq m Retail space: 70,000 sq m Office space: 15,000 sq m Others: 8,000 sq m Retail Trading Hub (Erqi District) Commodities Trading Hub (Railway District) Fashion Trading Hub (Guancheng District) J-Expo 2 ( • 2 )
  22. 22. CENTRALAND LIMITED 22 Tianrong Fashion City Old Residential Area Zhengzhou Long Distance Bus Station Zhengzhou Railway Station Tianrong Project ( ) Strategic location Close proximity (less than 1km) to Zhengzhou Railway Station & Zhengzhou Long Distance Central Bus Station Located within the fashion trading hub Total site area 24,026 + 16,792 = 40,818 sq m Comprises of Tianrong Fashion City and Old Residential Area Planned total leasable GFA of 553,000 sq m Retail space: 428,000 sq m Office space: 69,000 sq m Others: 56,000 sq m To be developed in stages over 5 yrs Construction expected to commence in 1Q 2011 Landmark project in Henan Province To be fully integrated with supporting infrastructure Bus station in basement Ample carpark facilities
  23. 23. CENTRALAND LIMITED 23 Tianrong Project – Acquisition Status Tianrong Fashion City: 24,026 sq m Total land cost: RMB1 billion Old Residential Area: 16,792 sq m Total intended acquisition site: 40,818 sq m Stage 1: 15,081 sq m (2 land parcels) Stage 2: 12,109 sq m (2 land parcels) • Acquired Henan Hezhi Co., Ltd. for RMB440 mil - Holds 80% stake in 2 land parcels • Funded by IPO proceeds and internal funds • Acquired Zhengzhou Longma Enterprise Co., Ltd for RMB360 mil in 2Q2010 - Holds 80% stake in 2 land parcels • Funded by IPO proceeds and internal funds • Adjacent site to Tianrong Fashion City • Land cost subject to government auction • Expected to take place in 4Q2010 • To develop into an integrated commercial development over a 5-year period The Group holds 80% stake in the JV
  24. 24. CENTRALAND LIMITED 24 Jiancaigang ( )
  25. 25. CENTRALAND LIMITED 25 Zhengzhou Tiandi Renhe acquired the master tenancy of Jiancaigang on 30 Nov 2009 Annual rent of RMB24 million Duration of 20 years (Expiry on 30 June 2028) First right of refusal to renew tenancy Jiancaigang : Wholesale Mall for automobile parts and building materials Within North Ring Trading Hub: one of Zhengzhou City’s 6 largest trading hubs Approx 1,300 tenants (as at 30 September 2010) Annual turnover of approx RMB1 billion Aggregate gross floor area: 354,568 sq m Site area: 758,574 sq m Reinforces capabilities in management of commercial properties, esp specialty wholesale trading hubs Jiancaigang ( ) The Group holds 80% of Zhengzhou Tiandi Renhe Two new stable income streams: Sub-leasing Property management
  26. 26. CENTRALAND LIMITED 26 Jiancai Gang North Ring Business District Jiancaigang (Geographical location)
  27. 27. CENTRALAND LIMITED 27 Nongye Road Project ( ) Expected start of construction: 4Q 2010 Expected completion: 3Q 2012 Site cleared for construction Artist Impression
  28. 28. CENTRALAND LIMITED 28 Nongye Road Project Nongye Road Project ( ) Acquisition of Nongye Road site for RMB70 mil Total site area of 16,123 sq m Strategic location At the boundary of the old city centre’s business district and the new Zhengdong CBD Planned total saleable GFA of 100,092 sq m Retail space: 15,407 sq m Residential units: 84,685 sq m
  29. 29. CENTRALAND LIMITED 29 Residential Project
  30. 30. CENTRALAND LIMITED 30 Phase I Yongfu Phase I Mufu Phase III Guoling Shanshui ( ) Remaining site area of 1.5 mil sq m held for future development Phase I & II (Completed and fully sold) Phase I: GFA of approx 57,954 sq m Phase II: GFA of approx 102,874 sq m Phase III – Total GFA of 132,000 sq m Stage 1: GFA of approx 43,000 sq m; construction underway Stage 2 GFA of approx 89,000 sq m; construction expected to start in 4Q2010 Phase II Xinyu Lanwan Phase II Huguang Shanse
  31. 31. CENTRALAND LIMITED 31 Remaining land bank (1.5m sq m) 9% 76% 15% Guoling Shanshui ( ) Phase III & Beyond Phase III development on track Site area of 174,412 sq m Stage 1 construction underway • Pre-sales launched in late October • Saleable GFA of 43,763 sq m Stage 2 construction expected to commence in 4Q2010 Saleable GFA of 89,000 sq m Remaining land bank Total site area of 1.5 mil sq m Land Bank (Site Area) Phase III (Development on track) (174,412 sq m) Phase I & II (Completed) (276,735 sq m) Phase III Type of unit Targeted Completion Date Total Saleable GFA (sq m) Units No of Units Sold* % GFA Sold Average ASP/unit (RMB/sqm) Stage 1 Low-rise apartments 4Q2012 43,763 540 387 72.5% (31,721 sq m) 6,206 Stage 2 Townhouses/ Duplexes/ Commercial units 89,000 Under planning - - - *As at 8 November 2010
  32. 32. CENTRALAND LIMITED 32 Guoling Shanshui ( ) Remaining Land Bank 1.5 million sq m Master Plan Approved for development in phases Lifestyle Development Luxury holiday homes Part of land bank leased out to third parties for complementary facilities Golf course Hotel Commercial retail units Guoling Shanshui ( ) Phase III & Beyond
  33. 33. CENTRALAND LIMITED 33 Guoling Shanshui ( ) Phase III Artist Impressions
  34. 34. CENTRALAND LIMITED 34 Guoling Shanshui ( ) Phase III Construction underway As at Mar 2010 Show unit interiors
  35. 35. CENTRALAND LIMITED 35 Project Pipeline 20152009 2010 2011 2012 2013 2014 Guoling Shanshui Phase III J-Expo 2 Tianrong Project Nongye Road Project Property under development New projects Jiancaigang
  36. 36. CENTRALAND LIMITED 36 Project Pipeline – Total GFA Uses Saleable/Leasable Estimated GFA (sq m) Residential - Guoling Shanshui Phase III - Nongye Road Project 216,685 132,000 84,685 Retail - J-Expo 2 - Tianrong Project - Nongye Road Project 513,407 70,000 428,000 15,407 Office & Commercial - J-Expo 2 - Tianrong Project 84,000 15,000 69,000 Property Management - Jiancaigang 354,568 354,568 Total : 1,168,660 sq m
  37. 37. CENTRALAND LIMITED 37 APPENDIX Overview of Zhengzhou
  38. 38. CENTRALAND LIMITED 38 Regional GDP Ranking Ranking Region GDP (RMB billion)* 1 Guangdong 3,569.6 2 Shandong 3,107.2 3 Jiangsu 3,031.3 4 Zhejiang 2,148.7 5 Henan 1,840.8 6 Hebei 1,618.9 7 Shanghai 1,369.8 8 Liaoning 1,346.2 9 Sichuan 1,250.6 10 Hubei 1,133.0 *As at 2008 Sources: China Statistical Yearbook 2009, Zhengzhou Statistical Yearbook 2009 Zhengzhou’s GDP
  39. 39. CENTRALAND LIMITED 39 Overview of Zhengzhou Capital city of Henan Province, one of China’s eight ancient capitals Located in the central part of the PRC and south of Yellow River Land area : 7,446 sq km Key national transportation hub for the country’s rail, highway and air transportation Intersection of two major trunk railways : North-South railroad line (Beijing-Guangzhou Railway) and East-West railroad line (Lanzhou-Lianyungang Railway) Zhengzhou Railway Station is China’s largest odd cargo volume transit-shipment station and has the 2nd highest volume of passenger transit in the PRC Source: Zhengzhou Zhengdong New District Investment Environment Study 2009 (KPMG Shanghai) Zhengzhou Urumqi Shanghai Hong Kong Beijing Source: Zhengzhou Statistical Yearbook 2008
  40. 40. CENTRALAND LIMITED 40 Source: Google mapsSource: http://www.china-mor.gov.cn/ Connectivity in Zhengzhou Located on the Beijing-Hong Kong-Macau Expressway which runs through China and the Lianyungang-Horgos Expressway, the longest West-East highway in China (1) Henan’s expressway mileage : 4,841 km, highest amongst all Chinese provinces (1) A total of 25 key trunk-line highways form a well-developed highway network linking Zhengzhou with other parts of PRC (2) Sources: (1) Zhengzhou Zhengdong New District Investment Environment Study 2009 (KPMG Shanghai) (2) www.zynews.com
  41. 41. CENTRALAND LIMITED 41 “Central City Cluster” - Zhengzhou as the centre of development Henan Provincial Government Zhengzhou : the Centre of Development The “Central City Cluster” includes 8 cities within one-hour drive from Zhengzhou Luoyang, Kaifeng, Xinxiang, Jiaozuo, Xuchang, Pingdingshan, Jincheng and Jiyuan Integration of Zhengzhou and Kaifeng as a Mega-City to enhance the development of the “Central City Cluster”
  42. 42. CENTRALAND LIMITED 42 Guangzhou Wenzhou Yiwu Zhengzhou Zhengzhou : Links East to the West Zhengzhou plays a crucial role in developing the Central and Western provinces Relocation of coastal trading hubs to Zhengzhou to serve the Central and Western parts of China Growth engine of domestic trade
  43. 43. CENTRALAND LIMITED 43 North Ring Business District Railway Business District Jiancai Gang J-Expo I and II Guancheng Business District Erqi Business District Tianrong Zhengzhou’s Specialty Trading Hubs Wenhualu Business District Bishagang Business District
  44. 44. CentraLand Limited CENTRALAND LIMITED Johnson Choo Vice President Investor Relations and Corporate Communications Mobile: +65 94506527 / +86 15838381086 Email: johnsonchoo@centralandltd.com

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