Financial Year 2017: Annual Results Presentation. 20 March 2018

Transcription

1 Financial Year 2017: Annual Results Presentation 20 March 2018

2 Disclaimer This presentation may contain forward-looking statements. Any such forward-looking statements are based on a number of assumptions about the operations of the Country Garden Holdings Company Limited (the Company ) and factors beyond the Company's control and are subject to significant risks and uncertainties, and accordingly, actual results may differ materially from these forward-looking statements. The Company undertakes no obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates. The information in this presentation should be considered in the context of the circumstances prevailing at the time of its presentation and has not been, and will not be, updated to reflect material developments which may occur after the date of this presentation. The slides forming part of this presentation have been prepared solely as a support for oral discussion about background information about the Company. This presentation also contains information and statistics relating to the China and property development industry. The Company has derived such information and data from unofficial sources, without independent verification. The Company cannot ensure that these sources have compiled such data and information on the same basis or with the same degree of accuracy or completeness as are found in other industries. You should not place undue reliance on statements in this presentation regarding the property development industry. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of any information or opinion contained herein. It should not be regarded by recipients as a substitute for the exercise of their own judgment. Information and opinion contained in this presentation may be based on or derived from the judgment and opinion of the management of the Company. Such information is not always capable of verification or validation. None of the Company or financial adviser of the Company, or any of their respective directors, officers, employees, agents or advisers shall be in any way responsible for the contents hereof, or shall be liable for any loss arising from use of the information contained in this presentation or otherwise arising in connection therewith. This presentation does not take into consideration the investment objectives, financial situation or particular needs of any particular investor. It shall not to be construed as a solicitation or an offer or invitation to buy or sell any securities or related financial instruments. No part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. This presentation may not be copied or otherwise reproduced. This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities in the United States or any other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No securities may be offered or sold in the United States absent registration or an applicable exemption from registration requirements. Any public offering of securities to be made in the United States will be made by means of a prospectus. Such prospectus will contain detailed information about the company making the offer and its management and financial statements. No public offer of securities is to be made by the Company in the United States Country Garden Holdings Company Limited. All rights reserved. 1

3 1 2 Results and Management Highlights Financial Overview Business Overview Strategic Outlook 3 4 2

4 Results and Management Highlights Summary of Results Management Highlights for FY2017 (RMB Billion) 1 As at 31 December FY2017 YoY growth Total assets % Total liabilities % Total debt % Cash and cash equivalents (adjusted) % Net debt % Total equity % Equity attributable to owners of the Company % Number of projects in Mainland 4 China , % Weighted average borrowing cost 6.20% 5.66% 5.22% -44b.p. Net gearing ratio 60.0% 48.7% 56.9% +8.2p.p Adjusted liability/asset ratio % 53.7% 55.9% +2.2p.p. (RMB Billion) 1 For the financial year ended 31 December FY YoY growth Contracted sales % Revenue % Gross profit % SG&A % As a percentage of contracted sales (%) 5.6% 4.0% 3.3% -0.7p.p. Net profit % Net profit attributable to owners of the Company % Core net profit attributable to owners 8 of the Company % EPS (RMB cents) % Dividend per share 9 (RMB cents) % Sales Results Achieved contracted sales of approximately RMB550.8 billion with contracted GFA of approximately million sq.m. in 2017, representing a year-on-year increase of 78% and 62% respectively Profit level Gross profit 7 amounted to RMB58.8 billion, up 82% YoY; gross profit margin recovered to 25.9% from 21.1% in 2016 Net profit attributable to owners of the Company amounted to RMB26.1 billion, up 126% YoY Cash Flow Management Cash generated from property sales in 2017 amounted to RMB500.3 billion, net cash generated from operating activities was about RMB24.08 billion Financial cost As at 31 December 2017, the Group s weighted average borrowing cost was 5.22%, representing a YoY decrease of 44b.p. Partnership Scheme Projects on partnership scheme: 1, projects on partnership scheme already launched for sale Achieved accumulated contracted sales of RMB809.9 billion Average cash flow breakeven period: 9.6months; annualized investment return 10 : 79%; net profit margin for contracted sales: 12% Notes: 1. Unless stated otherwise 2. Total debt = bank and other borrowings + senior notes + corporate bonds 3. Adjusted cash and cash equivalents = cash and cash equivalents + guarantee deposits for construction of pre-sale properties 4. Contracted or land permit received in Mainland China 5. Adjusted liability/asset ratio = (total liabilities advanced proceeds received from customers)/total assets. Advanced proceeds received from customers are reclassified to contract liability in Achieved by the Company and its subsidiaries, together with its joint ventures and associates 7. Gross profit or gross margin before LAT 8. It represents profit attributable to owners of the Company excluding the after-tax gains arising from changes in fair value of and transfer to investment properties, net exchange gains/losses on financial activities and the loss on early redemption of senior notes and change in fair value of derivative financial instruments 9. Annual dividends: Sum of interim dividend and final dividend. Due to early adoption of HKFRS15, there was a one-off adjustment of an increase of approx. RMB3.15 billion in the Group s retained earnings for the year ended 31 December 2016 and before, which was considered in dividends of Annualized investment return = (net margin*percentage of equity share) / annualized investment = (net margin*percentage of equity share) / (investment*numbers of years of investment). One year of investment = 1 in the equation 3

5 1 Results and Management Highlights Financial Overview 2 3 Business Overview Strategic Outlook 4 4

6 Financial Overview: Core Indicators (1/2) Revenue (RMB million) Recognized revenue from property sales (RMB million) 226, ,157 62,725 84, , ,087 60,043 81, , ,180 Delivered properties average selling price (RMB/sq.m.) Period-end book value per share (RMB) 6,498 6,724 6,194 6,191 7,

7 Financial Overview: Core Indicators (2/2) Gross profit 1 (RMB million) Net profit (RMB million) 58,785 28,752 18,719 22,055 22,863 32,236 8,848 10,612 9,712 13,663 Gross profit margin¹ 29.9% 26.1% 20.2% 21.1% 25.9% Net profit 14.1% margin 12.6% 8.6% 8.9% 12.7% Net profit attributable to the owners of the Company (RMB million) Core net profit attributable to the owners of the Company 2 (RMB million) 26,064 24,686 8,514 10,229 9,276 11,517 8,002 9,238 9,796 11,985 Notes: 1. Gross profit or gross margin before LAT 2. It represents profit attributable to owners of the Company excluding the after-tax gains arising from changes in fair value of and transfer to investment properties, net exchange gains/losses on financial activities and the loss on early redemption of senior notes and change in fair value of derivative financial instruments. 6

8 Financial Overview: Capital Structure (1/2) Net gearing ratio 1 70% 60% 50% 40% 30% 64.3% 57.0% 60.0% 56.9% 48.7% Budget management and net gearing ratio control EBITDA²/Interest coverage Total debt 3 /EBITDA² 3.3x 3.6x 3.8x 3.7x 4.2x 3.6x 3.3x 4.7x 5.3x 4.6x Notes: 1. Net gearing ratio = total debt cash & cash equivalents guarantee deposits for construction of pre-sale properties total equity 2. EBITDA defined as operating profit + interest expenditure + PP&E depreciation + amortization of land use rights and intangibles, excluding foreign exchange gain or loss and other extraordinary gains and losses 3. Total debt = bank and other borrowings + senior notes + corporate bonds 7

9 Financial Overview: Capital Structure (2/2) Weighted average borrowing cost 10% 8% 6% 4% 8.54% 8.16% 8.08% 7.59% 7.16% 6.20% 6.14% 5.74% 5.66% 5.22% 2% 0% During the period Period-end Cash generated from property sales in 2017 amounted to RMB500.3 billion, net cash generated from operating activities was about RMB24.08 billion, achieving positive net operating cash flow again since 2016 Debt maturity as of 31 December 2017 (RMB billion) Debt by currency (RMB billion) Total and Onshore loan Offshore loan Offshore senior notes Corporate bonds beyond Notes : 1. Other* : including MYR and other currencies Others*, 3.4,2% USD, 50.2, 23% RMB, 151.2,70% HKD, 10.0, 5% 8

10 1 2 Results and Management Highlights Financial Overview 3 Business Overview Strategic Overview 4 9

11 Business Overview: Contracted Sales (1/2) Contracted Sales 1 (RMB billion) Contracted Sales GFA 2 (mn sq.m.) Contracted Sales ASP (RMB/sq.m.) ,242 9, ,733 6,729 6, Notes : 1. Contracted sales achieved by the Company and its subsidiaries, together with its joint ventures and associates 2. Contracted sales GFA achieved by the Company and its subsidiaries, together with its joint ventures and associates 10

12 Business Overview: Contracted Sales (2/2) Contracted sales breakdown by type of products (by value) Mainland China contracted sales payment type breakdown(by value) Contracted sales breakdown by province/region (by value) Low-rise residential, 10% Parking lots and commercial, 8% High-rise residential, 82% From mortgage buyers, 78% From lump sum buyers, 19% From installment buyers, 3% Fujian,3% Guizhou,3% Hainan,3% Hubei,4% Henan,4% Hunan,4% Zhejiang,7% Others*,19% Guangdong, 30% Jiangsu,15% Anhui,8% Contracted sales of high-rise residential breakdown by size (by value) Contracted sales of low-rise residential breakdown by size (by value) Mainland China contracted sales breakdown by city type (by value) Above 140 sqm, 35% Below 90 sqm, 13% sqm, 52% Above 500 sqm, 7% sqm, 15% Below 300 sqm, 78% Located in tier 1 cities, targeting tier 1 cities, 7% Located in tier 2 cities, targeting tier 1 cities, 2% Located in tier 3&4 cities, targeting tier 1 cities, 4% Located in tier 2 Located in tier 3&4 cities, targeting tier cities, targeting 2 cities, 33% 3&4 cities, 50% Located in tier 3&4 cities, targeting tier 2 cities, 4% In 2017, Mainland China contracted sales breakdown by value: located in tier 1&2 cities - 42%,targeting tier 1&2 cities - 50% Notes: 1. Others* includes Guangxi, Hebei, Liaoning, Shandong, Malaysia, Shanghai, Sichuan, Shaanxi, Gansu, Chongqing, Jiangxi, Yunnan, Tianjin, Shanxi, Inner Mongolia, Qinghai, Jilin, Heilongjiang, Australia, Beijing and Ningxia. 11

13 Business Overview: Land Bank in Mainland China (1/2) As at 31 December 2017, number of projects acquired in Mainland China by the Group totaled 1,456 1, including 383 in Guangdong. The Group s projects in Mainland China span across 220 cities in 30 provinces/autonomous regions/ municipalities, covering a total of 768 districts / counties. 2 Heilongjiang 2 Xinjiang 1 Qinghai 12 Yunnan 6 Ningxia 8 Gansu 17 Sichuan 30 Chongqing 2 Jilin 4 Inner Mongolia 17 Liaoning 5 Beijing 16 Tianjin 7 Hebei Shandong Jiangsu 12 Shaanxi Henan Shanghai 73 Hubei Anhui 101 Zhejiang 35 Guizhou 53 Guangxi Shanxi 78 Hunan Jiangxi Fujian 383 Guangdong Note: 1. There were 12 projects outside Mainland China 18 Hainan 12

14 Business Overview: Land Bank in Mainland China (2/2) Land bank breakdown by location¹(by GFA) Shandong,3% Guizhou,4% Guangxi,4% Zhejiang,4% Other*,20% Henan, 5% Hubei,5% Hunan, 6% Anhui,8% Guangdong,28% Jiangsu,13% Land bank GFA breakdown by development stage 1 (mn sq.m.) Completed and pre-sold pending delivery Completed but unsold Under construction with sales permit - sold 11.2 Sales permit Under construction with sales permit - unsold Construction permit 52.1 Under construction without sales permit 87.8 Project acquired with land use right permit 69.8 Project acquired, pending land use right permit Among which, million sq.m. are attributable to owners of the Company In addition, potential land bank amounted to million sq.m. Total Newly acquired lands breakdown in 2017 by city type (by value) Located in tier 3&4 cities, targeting tier 3&4 cities,41% Located in tier 3&4 cities, targeting tier 2 cities,3% Located in tier 1 cities, targeting tier 1 cities,13% Located in tier 2 cities, targeting tier 1 cities,1% Located in tier 3&4 cities, targeting tier 1 cities,3% Located in tier 2 cities, targeting tier 2 cities,39% Land acquisition targeting tier 1&2 cities added up to 59% of land cost attributable to owners of the Company Newly acquired lands breakdown in 2017 by city type (by GFA) Located in tier 1 cities, targeting tier 1 cities,3% Located in tier 3&4 cities, targeting 3&4 cities,61% Located in tier 2 cities, targeting tier 1 cities,2% Located in tier 3&4 cities, targeting tier 1 cities,3% Located in tier 2 cities, targeting tier 2 cities,26% Located in tier 3&4 cities, targeting tier 2 cities,5% Land acquisition targeting tier 1&2 cities added up to 39% of GFA attributable to owners of the Company For 2017, the expected GFA of the Group s 881 acquired lands was million sq.m, with total cost of approximately RMB billion. Among them, expected GFA attributable to owners of the Company was approximately million sq.m. with total cost of approximately RMB billion. The average land cost was RMB3,225/sq.m. 160 land lots were acquired through M&A, accounting for 19% of total land cost Notes: 1. GFA breakdown of acquired projects as at 31 December 2017; contracted or land permit received. Land bank outside Mainland China was approximately 2.92 million sq.m. (excluding Forest City). 2. Others* including Fujian, Hebei, Chongqing, Jiangxi, Shaanxi, Sichuan, Liaoning, Hainan, Inner Mongolia, Tianjin, Yunnan, Gansu, Shanxi, Shanghai, Beijing, Ningxia, Xinjiang, Qinghai, Jilin, Heilongjiang. 13

15 Business Overview: Stronger Talent Pool to Support Matrix Management Executives with strong education background As at 31 December 2017,recruited 1,037 PhDs Matrix Management System HQ level lean and efficient Finance Project and regional manager candidates pool As at 31 December 2017, (apart from the existing executives) the Group has 37 regional manager candidates and 841 project manager candidates Enhancing talent pool to support matrix management Regional level further enhancement City/District level further market penetration Project level clear accountability 14

16 Business Overview: SSGF Industrialized Construction System with Technology Innovation and Management Optimization SSGF 1 Adoption of over 20 core construction technologies, including prefabricated wall panel, selfhealing waterproof, self-elevating climbing system, aluminum coating, cast-in-place wall and water interception system, etc. The Group has adopted the system since As of the end of 2017, there were 111 pilot projects out of 1,468 projects in total. The system will be widely adopted in future. Speed Period from commencement of construction to delivery of a 30-level high-rise residence can be shortened from 25.1 months to 15.8 months, approximately 9.3 months faster Efficiency Shorten construction period, reduce interest cost and enhance Return on Equity Prefabricated Wall Panel Quality Effectively fix defects brought by traditional construction methods, including leakage, cracking and hollowing, etc. Eco-friendliness Over 90% of plastering could be saved 2 Note: 1. SSGF: Sci-tech, Safe & share, Green and Fine & fast. 2. Data from internal estimation Self-elevating Climbing System 15

17 Result Highlights Hang Seng Index Inclusion Included as a constituent stock of the Hang Seng Index in November 2017 Achieved an investment-grade rating Company s credit rating was upgraded to investment grade from BB+ to BBB- by Fitch Ratings in September 2017 Growth of revenue and profit Revenue amounted to RMB226.9 billion, up 48% YoY; gross profit margin amounted to 25.9%, up 4.8 percentage points YoY; net profit attributable to owners of the Company amounted to RMB26.1 billion, up 126% YoY; dividend per share increased by 133% YoY Proven property sales results with high sell-through rate Contracted sales amounted to RMB550.8 billion, up 78% YoY; achieved a sell-through rate of 81.5% Positive cash flow Cash generated from property sales in 2017 amounted to RMB500.3 billion, net cash generated from operating activities was about RMB24.08 billion Further reduction of financing costs Weighted average borrowing cost as at 31 December 2017 was 5.22%, representing a YoY down of 44 basis points Further adjustment of land bank portfolio In dollar terms, less minority interests, for the Company s newly acquired land in 2017, 59% was targeting tier 1&2 cities while 41% was targeting tier 3&4 cities Increased product competitiveness Better product quality, accumulated successful delivery transaction of units to customers upon visits in 2017 has reached 99.31%, representing a YoY growth of 4.31 percentage points Performance of other business segment Property management business recorded external revenue of RMB2.66 billion with an operating profit of approximately RMB 490 million, representing a YoY increase of 36% and 20% respectively Strong management team Stable core management team with highly educated talents from different backgrounds. As at 31 December 2017, 1,037 recruited PhDs have been introduced to various positions in the Group and have been performing well 16

18 1 2 Results and Management Highlights Financial Overview 3 Business Overview Strategic Outlook 4 17

19 Strategic Overview: Becoming the Most Competitive Company in the Sector with Quality Development Partnership Scheme Capitalizing on urbanization Property-related business Sustainable development Diversify risk of a single project to cope with market volatility Quick turnover Prioritizing cash collection 18

20 Capitalizing on Urbanization: Dominance in Satellite Cities and Tier 3&4 Cities, Champion in Tier 1&2 Cities Mainstream products for 1st time buyers Continuous consolidation of the market Outperform peers by quality, costing and efficiency Core area of Tier 3&4 Cities (cities, counties and towns inclusive) Core area of Capturing spillover demand Tier 1&2 Cities Satellite City Better housing for upgraders Overwhelming product competencies Avoid oversupply of entry level products As of the end of 2017, 56 tier 3 cities, 136 tier 4 county level cities, 951 counties and 16,010 towns which meet investment standard were yet to be tapped into Capture buyers demands from Tier 1&2 Over 20 years of successful experience Has both pricing flexibility in tier 1&2 cities and high turnover in tier 3&4 cities Mostly large projects to boost scale 19

21 Capitalizing on Urbanization: Building Townships Integrated with Tech Clusters Implement strategy of integrating city with industries Building Tech-towns Focus on surrounding area of tier 1 cities and strong tier 2 cities Establish industrial development platform A variety of residential-inclusive business formats Development of Country Garden Techtowns MOU signed As of the end of 2017, entered into agreement with the government on 56 projects Rationale behind the move Strong support for real estate development business Echo with China s national industrial development and new urbanization policy Quality assets with recurring income generation potential Participate in VC investment and incubation in quality companies Implements As of the end of 2017, started 8 techtown projects with the majority located at Yangtze River Delta, Pearl River Delta, Beijing-Tianjin-Hebei region, as well as Hunan, Chongqing and Sichuan region First Tech-town project Located in Tonghu, Huizhou, commenced groundbreaking on 17 May 2017, marking the first demonstration project in Guangdong 20

22 Enhancing Partnership Scheme Partnership Scheme Under Country Garden Project Partnership Scheme, the company s projects enabled profit and risk sharing; Since October 2014, all new projects acquired by the Company would adopt the co-investment mechanism (the Group and project management can invest up to 15% of project equity); The senior management of the Company who participated in the co-investment scheme will normally invest in the project in the form of minority interest; Revenue with capital return generated by the project can be used to invest in another project while the profitable projects can dividend out profits. Property Business Unit 1 Country Garden Holdings Community Business Unit* Property Business Unit 2 1 Service support Health Business Unit* Property Business Unit 3 Partnership Scheme 2 Risk control 3 Full authorization Partnership Scheme Other Industries Business Unit* 15% Note: 1. *Some business units are still under planning. 21

23 Property Related Businesses: Promising Future for Rental and Property Management Business Rental Apartments Property Operation BIG+ Apartment Commenced operation in Beijing, Shanghai, Guangzhou, Shenzhen, Xiamen, etc. As at 31 December 2017, obtained 24 projects and was expected to provide over 8,000 apartments in the future Strong financial support Country Garden Rental Housing REIT No. 1: product scale reaches RMB10 billion China CITIC Bank - Country Garden Rental Fund: credit line - RMB30 billion Developed strategic cooperation with CCB Shanghai Branch and received RMB20 billion credit line support Evolution towards major rental communities Over 20,000 apartments in every major rental communities Implementation with an awareness of market conditions Drive customer traffic for property management Quality property operation to enhance rental apartment value Has a contracted management area of 329 million sq.m., of which 123 million sq.m. were servicing area, covering 1 million owners and residents in over 240 cities in 28 provinces / autonomous regions / municipalities in Mainland China. Target to expand management area via acquisition of external projects Property management business achieved external revenue of RMB2.66 billion with an operating profit of RMB490 million, up 36% and 20% YoY respectively Phoenix Selection Community retail business to provide Country Garden home-owners with quality products Support real estate sales and enhance housing value 22

24 Thank you for your confidence and support in Country Garden! 23

25 Appendix Appendix 1:Business Model Appendix 2:Cash Flow Statement 27 Appendix 3:Financial Overview - Costs 28 Appendix 4:Business Overview - Hotels and Investment Properties Appendix 5:Top 10 Projects in Mainland China with the Highest Contracted Sales in Appendix 6:Top 10 Projects by Recognized Revenue from Delivered Properties Sales in

26 Appendix 1 : Business Model Integrated and Standardized Value Chain (1/2) Design Materials Supply Construction Interior Decoration Sales and Marketing Property Management Ancillary Services Master plan design Architectural design Landscape design Pipe, marbles Dimension stones Construction Installation Lighting Security system Decoration Furniture In-house sales and marketing center directly managed by the headquarter Property management Hotel management School Retail facilities Transportations Country Garden subsidiaries or related parties Vertical Integration Standardization Investment analysis and decision making process is benefited from early participation of each project development stage Design and planning completed before land acquisition to ensure a swift construction process Collaboration across the entire value chain to ensure flexible deployment of resources Strive to provide homeowners with a 5-star home experience through comprehensive ancillary services 25

27 Appendix 1: Business Model High Asset Turnover (2/2) Standardization & Integration Focus on Urbanization Upfront design and construction work Flexible allocation of resources Clear working guidelines Flexible pricing strategy Lower initial investments Quick Development Quick Sales Quick Cash Collection 26

28 Appendix 2: Cash Flow Statement Cash Flow Statement(RMB bn) 1. Cash flows from operating activities Property sales Cash inflow from other segments and other operations Construction payments Land acquisition Interest paid Salary payments Taxes Others Net cash generated from operating activities Net cash used in investing activities (mainly for acquisition of subsidiaries, joint ventures and associates) 3. Cash flows from financing activities Net proceeds from debts Redemption and repayment of perpetual capital securities Receipts under securitization arrangement (net) Buy-back of shares Dividends paid to shareholders of the Company Others Net cash generated from financing activities Exchange gains/(losses) on cash and cash equivalents Net increase in cash and cash equivalents Add:Cash and cash equivalent at the beginning of the period Cash and cash equivalent at the end of the period Add:Restricted cash at the end of the period Available cash at the end of the period

29 Appendix 3: Financial Overview - Costs Costs and Net Profit (as % of revenue) 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 13.6% 12.1% 8.6% 1.1% 8.9% 0.7% 12.7% 0.2% 3.5% 3.0% 2.9% 3.2% 4.8% 4.9% 4.2% 2.1% 4.8% 4.3% 3.2% 3.7% 6.9% 5.2% 3.7% 4.4% 2.2% 1.9% 1.7% 5.5% 1.0% 2.2% 3.9% 2.6% 3.0% 6.4% 1.6% 2.0% 3.5% 6.4% 59.1% 56.5% 56.0% 53.5% 50.5% 9.8% 12.3% 13.2% 14.9% 14.3% Net Profit Income Tax Finance Cost Administrative Expenses Selling and Marketing Cost Other Cost Land Appreciation Tax Business Tax Construction Cost Land Cost SG&A (as % of contracted sales) 6.0% 5.8% 5.6% 4.1% 3.3% 3.3% 1.9% 2.5% 2.3% 4.0% 3.3% 2.4% 1.8% 1.6% 1.5% Adminstrative Expenses Selling and Marketing Cost Total 28

30 Appendix 4: Business Overview - Hotels As at 31 December 2017, the Group owned 48 hotels, among which 39 are in operation (33 five-star or five-star standard¹ and 6 four-star or four-star standard¹), with a total of 9,679 guest rooms, and another 9 hotels under construction Hotel Asset and Revenue 14,000 Hotel Asset(RMB mn) Hotel Revenue (RMB mn) 2,000 13,000 1,708 1,674 1,800 12,000 1,455 1,600 11,000 10,000 9,000 8, ,228 1,132 12,882 13,000 13,494 11,949 1,400 1,200 1, , , ,000 0 Note: 1. Hotels are only allowed to apply for star rating after one year of operation. 29

31 Appendix 4: Business Overview Investment Properties The Group s investment properties includes community stores in 87 projects in 15 provinces, 4 apartment projects and 6 large commercial complex projects. In 2017, the Group recorded approximately RMB380 million after tax gains on investment properties after revaluation, due to change in the Group s accounting policies since 2014 to recognize the fair value of investment properties on the balance sheet. As at 31 December 2017, the Group s investment property covered a GFA of million sq.m. with a fair value of RMB8.34 billion, of which the leased GFA of 609 thousand sq.m. carries a fair value of RMB5.64 billion. Investment property rental income amounted to approximately RMB110 million. Rented Completed projects (to be rented out) Under construction Total Type Community Stores GFA (sq.m.) Fair value (RMB 000) 2017 rental income (RMB 000) GFA (sq.m.) Fair value (RMB 000) GFA (sq.m.) Fair value (RMB 000) GFA (sq.m.) Fair value (RMB 000) 304,290 3,313,476 78, , , ,807 1,068, ,713 5,156,108 Apartments 82, ,650 19,010 25, , , ,470 Large commercial complex 222,827 1,843,636 9,825 60, ,767 32, , ,113 2,390,536 Total 609,186 5,644, , ,389 1,397, ,571 1,295, ,146 8,338,114 30

32 Appendix 5: Top 10 Projects in Mainland China with the Highest Contract Sales in 2017 Project Name (Location) Contracted Sales (RMB bn) Contracted Sales GFA (10,000 sq.m.) Country Garden Coral Palace (Lingshui) Asian Games City (Guangzhou) Country Garden Ten Miles Silver Beach (Huizhou) Country Garden Phoenix Town (Xi an) Country Garden Longcheng (Zhengzhou) Country Garden Yingzhou Mansion (Fuyang) Lanzhou Country Garden (Lanzhou) Country Garden Phoenix Town (Zhenjiang) Country Garden Europe City (Chuzhou) Country Garden Central Mansion (Haikou)

33 Appendix 6: Top 10 Projects by Recognized Revenue from Delivered Properties Sales in 2017 Project Name (Location) Recognized Revenue from Delivered Properties (RMB bn) Recognized GFA from Delivered Properties 1 (10,000 sq.m.) Country Garden Ten Miles Silver Beach (Huizhou) Country Garden Golden Bay (Malaysia) Humen Country Garden (Dongguan) Lanzhou Country Garden (Lanzhou) Nanjing Country Garden (Nanjing) Country Garden Coral Palace (Lingshui) Songhu Country Garden (Dongguan) Country Garden Phoenix Town (Guangzhou) Country Garden Bay No.1 (Guangzhou) Country Garden Phoenix Town (Zhenjiang) Note: 1. Including underground area 32