Extracted from Annual Report 2015
"THE GROUP ACHIEVED 62% HIGHER REVENUE IN FY2015 TO RMB3.6 BILLION, MAINLY DUE TO THE INCREASE IN THE NUMBER OF UNITS THAT WERE HANDED OVER TO BUYERS. CHIWAYLAND WILL CONTINUE TO SEEK OUT STRATEGIC OPPORTUNITIES TO STRENGTHEN ITS PRESENCE IN BOTH ITS CHINA AND AUSTRALIA MARKETS."
On behalf of the Board of Chiwayland International Limited (中锐地产国际股份有限公司) ("Chiwayland" or the "Group"), I am pleased to present to you the annual report for the financial year ended 31 December 2015 ("FY2015").
FY2015 was an encouraging year for the Group. The overall real estate market in China received a boost from the government as interest rates were lowered and minimum downpayments for second home buyers were cut three times during the year. The Group achieved 62% higher revenue in FY2015 to RMB3.6 billion, mainly due to the increase in the number of units that were handed over to buyers, as well as the higher average selling prices ("ASP") of property units that were handed over. The Group recorded a 6% increase in aggregate GFA sold and recognized or 25,326 sqm, from 420,780 sqm in FY2014 to 446,106 sqm in FY2015, while it recorded an approximately 52% increase in ASP or RMB2,742 per square metre (“sqm”) in FY2015. This was mainly attributable to the Suzhou Royal Palace, Zhangjiagang Royal Palace and Xuzhou Royal Palace projects.
We also saw increased pre-sales activities for the launch and presales of our new projects in both China and Australia. Chiwayland prides itself in being very selective in choosing the land site for our property development projects as we believe that location and the convenience it provides are key consideration factors for buyers. Hence, most of our projects are in prime locations and command higher ASP. In China, the Group achieved pre-sales GFA of approximately 377,694 sqm in FY2015 (22.7% higher than that in FY2014) with an aggregate consideration of approximately RMB4.2 billion in FY2015 (68% higher than that in FY2014), mainly from the launch and pre-sales of Suzhou Royal Palace and Suzhou Industrial Park Royal Mansion. In Australia, we have started to launch the pre-sales activities for three of our development projects, namely Vivir, Illumina and Uptown. A total of 314 units from these projects have been pre-sold, with an aggregate consideration of AUD222.9 million.
Our selling and distribution expenses and administrative expenses were higher, in line with the rise in business activities. However, in the absence of the one-off RTO related expenses incurred last year, the Group achieved a 290% increase in net profit attributable to owners to RMB37.7 million in FY2015.
As the Chinese government unwinds the cooling measures that were previously implemented, demand for residential properties in China is likely to remain stable. Similarly in Australia, interstate migration and a relatively low interest rate environment continue to lend support to demand for residential housing. In FY2015, the Group won the land use rights for four land parcels in Suzhou and Nanjing, China. It plans to develop these land sites into residential and commercial units. The Group also further strengthened its presence in Australia with the successful tenders for two land parcels, in the Epping and Ryde suburbs of Sydney. The Group plans to develop these two sites into residential developments with 90 units each. The land site in Epping spans across an area of 4,424 sqm, while that at Ryde is approximately 2,866 sqm.
While the Group continues to establish itself in Australia, it has also embarked on setting up a presence in the United States. In March 2016, the Group has entered into an interim business agreement with Urban Comms, LLC ("Urban Comms") to jointly develop a mixed-use development project in Los Angeles, California. This project is expected to include retail, hotel and residential units. Urban Comms is a Los Angeles-based real estate development company that specialises in hotel and mixed-use development properties. With this collaboration in place, it would open up more opportunities for the Group to expand in the US. Chiwayland will be better positioned to become an international real estate development group as it continues to grow.
During the year, the Group made its foray into the fund management business to manage and administer borrowings raised from investors and high net worth individuals. This would enable it to take advantage of the opportunities in the real estate sector to make further real estate and real estate-related investments, and take the Group to greater heights. Apart from investments in and divestments of properties under its own portfolio, the fund management business may also be able to identify potential property development opportunities for the Group, which in turn could contribute positively to its growth.
The global economic slowdown presents a challenging environment to the overall real estate markets in both China and Australia. Nonetheless, the Group will continue to seek out strategic opportunities to strengthen its presence in both markets, while building on our track record in our key China market. We remain committed to delivering "quality real estate and quality living" to our customers.
At our last Annual General Meeting held on 27 April 2015, Mr Chua Yong Hai did not seek re-election and stepped down from the Board as the Lead Independent Director. On behalf of the Board, we would like to thank Mr Chua for his valuable contributions and guidance to the Group. We would also like to welcome Mr Chua Hwee Song, who joined the Board as Independent Non-Executive Director on 06 July 2015.
I would like to express my appreciation to our Board of Directors for their contributions and guidance throughout the year. On behalf of the Board, I would also like to thank our management and staff for their commitment and hard work. Last but not least, I would like to thank our shareholders, customers and business partners, for their continued support and confidence. We remain committed to improving value for our stakeholders.
Qian JianrongExecutive Chairman & Chief Executive Officer