Increasing marketing efforts in development properties segment,
Fully exploring the potential in investment properties segment,
Company’s benefits steadily increased
v Revenue amounted to RMB 2.867 billion, representing a year-on-year increase of 7.17%
Financial and Business Highlights
v Profit before income tax was RMB 832 million, increased by 21.04%
v Profit attributable to equity holders of the Company was RMB 556 million, increased by 12.41%
v The core operating results of the Company’s principal operations was RMB 420 million, increased by 15.42%
v Earnings per share was RMB 0.165
v By sharpening its competitive edge in project development and adjusting its market strategies accordingly, the Company achieved favorable operating results
v National Convention Centre hosted 610 conventions and 36 exhibitions including the 2nd CIFTIS and the 3rd Beijing International Film Festival, and significantly enhanced the profile and influence of North Star Convention and Exhibition
v The rents of North Star Times Tower and North Star Century Centre near full occupancy hit the upper range of rents for office buildings of similar quality, which had become a major source of profit in the segment of investment properties (including hotels)
During the period, the Company recorded an operating revenue of RMB 2.867 billion, representing a year-on-year increase of 7.17%, The profit before tax and profit attributable to equity holders posted RMB 832 million and RMB 556 million, representing a year-on-year increase of 21.04% and 12.41% respectively, wherein the core operating results of the Company’s principal business increased by 15.42% to RMB 420 million. The gain on changes in fair value of investment properties (before tax) amounted to RMB181 million, representing a year-on-year increase of 4.04%. Earnings per share were RMB 0.165, increased by 12.41%.
Reviewing the 2013 interim results, Mr. He Jiangchuan, the Chairman of Beijing North Star, stated, ‘In response to the complex and volatile macro economy and the highly competitive micro market of the industry, the Company actively focused on its overall objective: building a first-class large-scale integrated real estate operating company of the country by expanding development models and marketing ideas, seizing market opportunities, making efforts to improve sales, further intensifying functional district of North Star Convention and Exhibition and promoting the three major development strategies at the same time, i.e. capital expansion, brand expansion and low-cost expansion. The Company’s core competitiveness and sustainable development continued to improve. ‘
As for development properties, during the reporting period, The Company conducted an in-depth research and assessment of the trend of the real estate market development under macroeconomic control, strengthened the project characteristics and adjusted its marketing strategies accordingly. By sharpening its competitive edge in project development and increasing marketing efforts, the Company achieved favorable operating results. In the first half year of 2013, North Star Xianglu Villa, with the introduction of stronger marketing initiatives to have a firm grip on the opportunities arising from market rally, recorded significant growth sales, with approximately 206 signed contracts, amounting to RMB 627,430,000 in the first half of the year. In addition, for North Star Bihai Fangzhou Villa, construction had come to the final stage and efforts were made in facilitating the signing of subscribed villas. Apart from that, the Company continuously accelerated the development and promotion of North Star Delta Project. Relating to construction, the Company speeded up the construction of the mage urban complex along the river in A1 and D1 blocks and ordinary estate product in D2 and E3 blocks. At the same time, Yali Middle School (Campus), a key middle school in Changsha and Qingshuitang Primary School (Campus), passed the final inspection upon completion and will begin admitting students in September. Relating to marketing, the Company made use of its overall competitive advantages in project development and its strength in ancillary service, encouraged sales of large housing products and achieved contracted sales with major customers. During the reporting period, the operating revenue of the development properties segment of the Company recorded RMB1,634,205,000 (including car parks), representing a year-on-year increase of 12.51%. Due to structural changes in settlement of projects, profit before tax of the development properties segment was RMB355,720,000, representing a year-on-year increase of 29.08%.
As for investment properties (include hotels), the Company fully capitalized on the comprehensive operating advantages in investing in integrated properties led by conventions. Through measures such as co-sale of convention and exhibition, specialization in operation, upgrade in infrastructure, and segmentation of the market to adjust its service and positioning, the Company fully explored its potential in operation and steadily increased its benefits. In the first half of 2013, the investment properties (including hotels) of the Company recorded revenue from principal businesses of RMB1,001,607,000, representing a year-on-year increase of 4.28%. Without taking into account the amortization of interest expenses, profit before tax amounted to RMB332,139,000, posting a remarkable year-on-year growth of 13.32%. In particular, the economic benefits of new projects including China National Convention Centre, North Star Times Tower as well as North Star Century Centre delivered steady growth and recorded RMB231,500,000 in profit before tax, representing 69.70% of the profit for the whole investment properties (including hotels) segment and also outperforming in their operations: during the reporting period, National Convention Centre hosted 610 conventions and 36 exhibitions including the 2nd CIFTIS and the 3rd Beijing International Film Festival, and significantly enhanced the profile and influence of North Star Convention and Exhibition; in order to enhance the implementation of Company’s strategy of brand expansion, the Company provided early consultation service to Nanchang International Convention Centre in the first half of 2013 again; As for the office building segment, through optimizing the customer structure based on the change in supply-demand relationship in the market. The rents of North Star Times Tower and North Star Century Centre near full occupancy hit the upper range of rents for office buildings of similar quality. The rents had become a major source of profit in the segment of investment properties (including hotels).
As for commercial properties, in an increasingly competitive market environment, the Company attached importance to improving its ability in attracting businesses and deepened its efforts in combining different segments and brands. Its endeavors in improving customer experience and consumer satisfaction were paid off with steady operation in properties. During the reporting period, the operating revenue from the business of commercial properties was RMB174,815,000 and the profit before tax was RMB5,767,000.
Looking ahead, in the second half of 2013, the Company expects to realize new construction of an area of 602,000m2, construction area commenced and resumed of 2,530,000m2 and construction completed of an area of 584,000m2. Area sold is targeted to be 243,000m2 and the amount of contracted sales is targeted to be RMB3.56 billion.
Mr. He concluded, ‘facing the macro-control in real estate industry and fierce competition among the market, the Company will conduct in-depth research on the changes in market trends and the needs of customers, continue to innovative marketing modes, with a focus on improving the products’ quality and turnover rate. Management standardization will be adopted to further improve the management of project management. In addition, the Company will vigorously seek opportunities in the market and achieve low-cost expansion by open trading, acquisitions, mergers and joint developments, with an aim to selectively increase its land bank and expand the new real estate business mode, so as to reinforce the core competitiveness and sustainable development capability of its development properties. Besides, by leveraging the existing brand influence and soft power of North Star Convention and Exhibition, the Company will innovate new development modes, accelerate the implementation of its brand expansion strategy and intensify the promotion of management for exhibition venues with an aim to accomplish a parallel development of both investment business of heavy assets and the service business of light assets, thus creating a new pattern for the Company’s innovative development.’
v Revenue amounted to RMB 2.867 billion, representing a year-on-year increase of 7.17%