Sino-Ocean Land (3377.HK) FY10 annual results

Transcription

1 Sino-Ocean Land (3377.HK) FY10 annual results March 2011

2 About Sino-Ocean Land (3377.HK) Key businesses A leading developer in Beijing and the Pan-Bohai Rim focusing on building mid-to-high end residential properties, premium office premises, serviced apartments and retail space. Shareholding structure Listed in Sep 07, the total issued shares reached approx. 5.6bn as of Mar 1, Major shareholders China Life (2628.HK) holds 24.07% and Nan Fung Group, a reputable private Hong Kong developer, holds 12.84%. Land bank size Total GFA: approx. 21mn sqm as of Dec 31, Attributable GFA: approx. 19mn sqm, as of Dec 31, Acquired approx. 7.9mn sqm of land in FY10. Land bank locations At prime locations / transportation hubs in 16 high economic growth cities, mainly in Beijing and the Pan-Bohai Rim (79%), Yangtze River Delta (6%), along Yangtze River (7%) and Pearl River Delta (7%) as of Dec 31,

3 FY10 results highlights Sales and net profit rose substantially FY10 revenue up 55% YoY to RMB13.7bn. Profit attributable to equity holders of the company rose remarkably by 54% YoY to RMB2.44bn. Profit attributable to equity holders excl. one off items increased dramatically by 67% YoY to RMB1.87bn in FY10. Achieved record-high contracted sales of RMB21.6bn in FY10, a growth of 51% YoY, about 20% higher than target. Able to deliver new high sales every year since listing despite market turbulence. Delivered CAGR of 52% in contracted sales since listing in FY07. 3

4 FY10 results highlights High earnings visibility and transparency Locked-in sales of RMB20.4bn for booking in FY11-FY12 as at Dec 31,10. Disclosed detailed 5-year development plan in early 2010 and expanded accordingly geographical locations, channels and product types (please refer to slide 16 for details). Robust financial position (as of Dec 31, 2010) Cash on hand: approx. RMB15bn, about RMB1.1bn was restricted. Net gearing ratio: 46%. Approved but undrawn credit facilities: approx. RMB13.6bn 4

5 FY10 results highlights Strong sales in new cities Dalian: market share ranked 2 nd. Sales amount of flagship project Ocean Worldview ranked 2 nd in the city. 1 Tianjin: sales of flagship project Ocean City ranked 3 rd in the city and ranked 1 st in Binhai New Area. 2 Shenyang: sales of flagship project Ocean Paradise came 1 st in the city. 3 Zhongshan: sales of flagship project Ocean City came 1 st in the city. 4 Hangzhou: market share ranked 5 th in Hangzhou s main city area. 5 Source: 1. dl.eeju.com, a widely used web portal providing real estate related data a well accepted web portal providing real estate related data of Tianjin a database run by Shenyang Housing Administration Bureau and sy.eeju.com run by Worldunion Properties, a listed real estate consulting company and Company data a database run by Hangzhou Housing Administration Bureau. 5

6 FY10 results highlights Captured best timing for expansion Captured good opportunities for land acquisition arising from this market cycle and acceleration of market consolidation. About half of the GFA in land parcels bought was from the government, of which close to 80% was acquired at base price. Projects acquired in Chengdu and Sanya were able to generate sales within the same year. 6

7 Annual results FY10 7 Ocean Great Harmony, Beijing 北京万和城

8 Summary of FY10 P&L (RMB mn) FY10 FY09 Change Revenue 13,721 8,824 55% Gross profit 4,125 2,657 55% Gross profit margin 30% 30% Unchanged Profit attributable to equity holders 2,444 1,582 54% Profit attributable to equity holders excl. one off items 1,869 1,118 67% Net profit margin 18% 18% Unchanged Net profit margin excl. one off items 14% 13% 1% EPS-basic (RMB cents) % Total dividend per share (HK cents) % 8

9 Revenue breakdown by business operations 9

10 Property development revenue breakdown by locations FY10 revenue from property development RMB 12.8bn, up 56%. FY10 GFA delivered: 1,224,000sqm, up 42%. FY10 ASP (including car parks sales): RMB10,500/sqm, up 10%. 10

11 Investment properties (completed) Property investment contributed RMB212mn of revenue in FY10, up 36% YoY The properties that began leasing in recent years saw stable growth in occupancy rate. Projects GFA for lease (sqm) Occupancy rate as of end of FY10 end of FY09 Attributable interest Ocean Plaza 远洋大厦 Along Chang An Ave, Beijing, opposite to the People s Bank of China 31,000 Over 95% Over 95% 72% Block A of Ocean International Center 远洋国际中心 A 座 Near East 4 th Ring Road, Beijing 83,000 Over 90% 85% Ocean Office Park 远洋光华国际 CBD, Beijing (Began leasing in 2H09) Shui On Plaza* 瑞安广场 Luwan District, Shanghai Novel Building* 永新大厦 Luwan District, Shanghai Ocean Express Car parks 远洋新干线车位 Yansha Business District, Beijing 99,000 Over 65% 10% 3,000 Over 75% N/A 70% 6,000 Over 95% N/A 63% 15,000 About 10% N/A Total 237,000 * Note: Held by a subsidiary Gemini Property Investment Company Limited, a Hong Kong listed company. 11

12 Summary of FY10 cash flow (RMB bn) Cash on hand as of Dec 31, Cash inflow Sales proceeds 19.6 Rental income, interior fitting out services and others 3.8 Loans net add Issued Perpetual Subordinated Convertible Securities 7.1 Subtotal 40 Cash outflow Land premium settled Construction costs settled -6.5 Taxes -2.9 Dividend paid SG&A and other expenses -4.4 Subtotal Cash on hand as of Dec 31, Note: 1. New loans obtained less loans settled 12

13 Business review Ocean International Center, Beijing 北京远洋国际中心

14 FY10 Contracted sales breakdown by locations FY10 GFA sold: 1,660,000sqm, up 15%. FY10 ASP (including car parks sales): RMB13,000/sqm, up 31% from FY09 s RMB9,942/sqm mainly due to higher proportion of high-end projects sold. City Sales amount FY10 (RMB mn) Increase in sales amount YoY As % of sales in FY10 GFA sold ( 000 sqm) Change in GFA sold YoY ASP (RMB/sqm) Change in ASP YoY Beijing 7,855 15% 36% 428 0% 18,400 15% Dalian 3,825 11% 18% 355-9% 10,800 22%* Tianjin 2,915 50% 13% 303 3% 9,600 45%* Zhongshan 1,839 22% 9% 226 0% 8,100 22%* Shenyang 1, % 8% % 8,200 47%* Hangzhou 2,834 N/A 13% 83 N/A 34,100 N/A Sanya 400 N/A 2% 21 N/A 19,000 N/A Chengdu 186 N/A 1% 28 N/A 6,600 N/A Qinhuangdao 71 N/A 0% 11 N/A 6,500 N/A TOTAL 21,603 51% 1,660 15% 13,000 31% * Note: ASP increase due to higher number of villas sold. 14

15 Analysis of buyers backgrounds Payment method Residential (based on number of units sold) Cash FY10 Mortgage High-end 43% 57% Mid-range 31% 69% For buyers using mortgages, about 70% were first-timers Residential (based on number of units sold) First-timers* FY10 Upgraders* High-end 68% 32% Mid-range 73% 27% Local vs. non-local buyers Residential (based on number of units sold) With local household registration ( 户口 ) FY10 Without local household registration Sino-Ocean 73% 27% * We consider buyers who put a down payment of 20-49% as first-timers, those who put a down payment of 50%+ as upgraders. 15

16 Development plan Principles: Riding on the acceleration of urbanization, we aim to speed up developments in 2 nd and 3 rd tier cities. Scale: To speed up land replenishment appropriately to satisfy the needs in the coming 6-8 years. Product mix: Developing private housing remains the key focus. We will gradually increase the scale of investment properties as well as develop new products, e.g. resort and retirement homes. Maximize returns Strategic locations: Enter into more cities along the coastal and Yangtze River economic belts, as well as those high-growth regions in the Southwest. Will also target emerging cities and those with unique characteristics. Channels Mainly from the government through auction, bidding and tendering, as well as M&A. 16

17 Land bank expand according to new five-year development plan Land bank(as at 31 Dec 2010) Total GFA: approx. 21mn sqm. Sufficient for 6-8 years of development. Changchun Beijing Shenyang Qinhuangdao Dalian Tianjin Qingdao Pan-Bohai Rim (79%) Along Yangtze River (7%) Chengdu Chongqing Huangshan Wuhan Shanghai Yangtze River Delta (6%) Hangzhou Zhongshan Pearl River Delta (7%) Cities entered in 2010 Cities entered before 2010 Sanya Haikou International Tourism Island (1%) 17

18 Managing projects For the Group By centralizing the legal structure at headquarters management and leaving the day-to-day operation to the local companies, the Group is able to achieve an effective balance of risk control and operational flexibility, a special characteristic of our management model. There are specialized companies to run other businesses, eg commercial property companies are responsible for commercial and investment properties. For new cities Upon completion of an in-depth study of the city, research team from the Group will compile and present a report to the Development Management Committee. Once a decision is reached on the land plot, a project company will be set up to acquire the land for development. The Group will assign a project manager and finance staff to work with locally recruited talents, forming a team that understands the local culture and the needs and preferences of local customers. Using an efficient IT system to unify the management and development processes and to consolidate and share information. 18

19 Commercial properties in development Projects Total planned GFA *(sqm) Development progress Estimated completion date Attributable interest INDIGO in Beijing 北京颐堤港 Lidu business district, Beijing 295,200 (leasable: 176,000) Construction in progress % (a JV with Swire Properties) Area C of Ocean Great Harmony in Beijing 北京远洋万和城 C 区 North 4 th Ring Rd, Beijing 97,500 Construction in progress 2012 Ocean Landscape Eastern Area in Beijing 北京远洋沁山水, West 4 th Ring Road, Beijing Wangfujing Project in Beijing 北京王府井项目 Chang an Avenue, Beijing 103,200 Planning ,000 Planning Planning Ocean Paradise Phase II in Tianjin 天津海河新天地 city center of Tianjin 304,900 Construction in progress % Ocean Worldview in Dalian 大连红星海世界观 Development Zone in Dalian Ocean Paradise in Shenyang 沈阳远洋天地 South bank of Hun River, Shenyang 53,600 Planning ,800 Planning 2016 Ocean City in Tianjin 天津远洋城 Center of Binhai District, Tianjin 47,100 Start construction in 2H Ocean Plaza in Dalian 大连远洋广场 Ganjingzi District, Dalian 46,400 Start construction in 2Q Sub-total: 1,016,700 *Note: Will disclose GFA for investment upon completion. 19

20 Commercial properties in development (cont.) Projects Total planned GFA* (sqm) Development progress Estimated completion date Attributable interest Jingyue Project in Changchun 长春净月 Southeast of the city Canal Business District 杭州运河商务区 at Gongshu District, Hangzhou Ocean City in Zhongshan 中山远洋城 Eastern part of Zhongshan City 227,900 Resettling % 414,300 Refining project design % 261,000 Refining project design 2013 Dawangjing Project in Beijing 北京大望京项目 North of Wangjing District 49,300 Start construction in 1H CBD Z6 Project in Beijing 北京 CBD Z6 项目 CBD, Beijing 250,000 Planning Planning 80% Daci Project in Chengdu 成都大慈寺项目 CBD, Chengdu 384,100 Planning % (a JV with Swire Properties) Diamond Bay in Dalian 大连钻石湾项目 Ganjingzi District, Dalian Jingmian Project in Beijing 北京京棉项目 East 4 th Ring Road 290,000 Planning Planning 90% 87,400 Planning % Sub-total: 1,964,000 Total: 2,980,700 *Note: Will disclose GFA for investment upon completion. 20

21 Sales and development strategies in 2011 Ocean City, Zhongshan 中山远洋城

22 Views on policy impact The policies will have major impact on the market. Transaction volume in the first half of the year will fall substantially as buyers adopt a wait-and-see attitude. The macro policies will become permanent and have long-term effects, the most notable one at present being restriction on the number of units an individual is allowed to purchase. However, the government is expected to adjust its policies when China s economy is developing in a healthy and stable manner. The impact will be felt more in 1 st and the so-called over-heated 2 nd tier cities and less so in ordinary 2 nd and lower tier cities. In terms of products, mid-range residential units will be affected most and less seriously among high-end residential and commercial properties. As the performance gap of developers widens, the market will focus even more on solid brands such as Sino-Ocean. The policies will not affect developers performance in 2011 and 2012 too badly. The key is how to cope with the pace of development from 2013 onwards. All developers will seriously consider getting involved in developing social housing. 22

23 Development strategies in FY11 Secure operation of the Company, ensuring effortless cashflow at times of market adjustment. Control investment on land and maintain investment on construction-in-progress. Apply stringent control on non-construction expenses and keep liabilities at a safe level. Speed up asset turnover, sales of completed units and construction of projects. Put more emphasis on developing projects on low-cost land plots to increase saleable resources and speed up return of capital. Focus more on projects outside existing over-heated cities and also on commercial properties. Monitor closely the peripheral areas of 1 st tier cities and pockets in 2 nd tier cities that are not over-heated; actively develop projects in 3 rd and 4 th tier cities with high GDP per capita and good resources, both natural and constructed, eg sea view, green view, golf course etc. Nurture and grow the investment business and grasp M&A opportunities arising in the market cycle. Continue to upgrade product quality as we have always done and create more products that are good value for money. 23

24 New shareholding structure Ocean Landscape Eastern Area, Beijing 北京远洋沁山水

25 Shareholding structure As of Mar 1, 2011: China Life (2628.HK) Nan Fung Group Public shareholders 24.07% 12.84% 63.09% Sino-Ocean Land (3377.HK) China Life (2628.HK) Nan Fung Group COSCO Int l (517.HK) Public shareholders Total issued capital In mid-december 2010, before COSCO Intl sold all their stakes 24.07% N/A 16.85% 59.08% 5.6bn As of March 1, % 12.84% % 5.6bn Assumed ONLY Nan Fung has converted their PCS Assumed ALL the PCS have been converted 22.07% 20.07% % 6.15bn 20.38% 18.53% % 6.7bn Note: PCS = Perpetual subordinated convertible securities 25

26 Appendices Ocean Paradise, Shenyang 沈阳远洋天地

27 Appendix 1: Projects booked in FY10 Project Revenue (RMB mn) GFA delivered (sqm) ASP (RMB/sqm) Project type Attributable interest Beijing 北京 Ocean Landscape Eastern Area 远洋沁山水 Ocean Honored Chateau 远洋公館 Ocean Landscape 远洋山水 Ocean Seasons 远洋自然 Poetry of River 远洋一方 Ocean Office Park 远洋光华国际 Ocean Great Harmony 远洋万和城 2, , ,462 8,130 18,629 4,572 2,560 23,239 74,641 12,600 42,300 12,000 7,700 14,500 14,000 34,900 Residential Residential Retail, residential Retail, residential Office, retail Residential Residential 70% Tianjin 天津 Ocean Express 远洋新干线 Ocean City 远洋城 Ocean Paradise 远洋天地 156 1, , ,701 7,848 12,200 6,800 12,200 Residential Residential Office, retail 97.05% 96.99% Sub-total: 7, ,621 14,200 Continue on next page 27

28 Appendix 1: Projects booked in FY10(cont.) Project Revenue (RMB mn) GFA delivered (sqm) ASP (RMB/sqm) Project type Attributable interest Dalian 大连 Ocean Prospect 远洋风景 Xiangsong Project 香頌花城 Ocean Worldview 红星海世界观 ,983 22,840 95, ,089 18,900 3,900 9,400 Residential Residential Residential Shenyang 沈阳 Ocean Paradise 远洋天地 ,482 5,900 Residential Zhongshan 中山 Ocean City 远洋城 1, ,500 8,300 Residential Qinhuangdao 秦皇岛 Wan Hai Yi Hao 湾海一号 45 6,529 6,900 Residential Sub-total: 4, ,036 8,200 Parking lots in various projects ,929 3,600 Total: 12,798 1,223,586 10,500 28

29 Appendix 2: Update on completion progress Projects Beijing 北京 Ocean Great Harmony 远洋万和城 Ocean Landscape Eastern Area 远洋沁山水 Poetry of River 远洋一方 The Place 远洋新悦 Ocean La Vie 远洋 La Vie INDIGO 颐堤港 Tianjin 天津 Ocean Express 远洋新干线 Ocean City 远洋城 Dalian 大连 Ocean Prospect 远洋风景 Xiangsong Project 香頌花城 Ocean Worldview 远洋紅星海世界观 Ocean Seasons 远洋自然 GFA completed in FY10 (sqm) 112, ,000 23, , ,000 30,000 99, ,000 - Target GFA to complete in FY11 (sqm) 5, , ,000 34,000 54, , , ,000 30, , ,000 Shenyang 沈阳 Ocean Paradise 远洋天地 29, ,000 Zhongshan 中山 Ocean City 远洋城 208, ,000 Sanya 三亚 Ocean Olympics 远洋奥林匹克公馆 - 53,000 Total: 1,292,000 2,302,000 29

30 Appendix 3: FY10 Contracted sales details Project Contracted sales amount (RMB mn) GFA sold (sqm) ASP (RMB/sqm) Launch date Attributable interest Beijing 北京 Ocean Great Harmony 远洋万和城 Ocean Honored Chateau 远洋公館 Ocean Landscape 远洋山水 Ocean Landscape Eastern Area 远洋沁山水 Poetry of River and Capped Price Housing 远洋一方及双限房 Ocean Seasons 远洋自然 Ocean Oriental 远洋东方 The Place 远洋新悦 1, ,508 1, ,294 39,649 6,971 7,902 94, ,762 23,343 21,834 69,288 44,800 42,900 13,900 26,400 10,700* 6,900 16,000 18,700 2Q08 2Q08 Last batch 4Q08 4Q07 Office and retail 3Q09 4Q10 70% Tianjin 天津 Ocean City 远洋城 Ocean Express 远洋新干线 Ocean Paradise 海河新天地 Ocean Great Harmony 远洋万和城 2, ,841 60,453 3,967 13,559 9,200 10,700 13,600 14,200 4Q08 1Q08 Retail 4Q % 96.99% Sub-total: 10, ,457 15,800 *Note: ASP of Poetry of River including parking lots was RMB18,371/sqm. The ASP of the Capped price housing was RMB7,400/sqm. Continue on next page 30

31 Appendix 3: FY10 Contracted sales details (cont.) Project Dalian Ocean Prospect 远洋风景 Ocean Worldview 远洋红星海世界观 Xiangsong Project 香頌花城 Ocean Seasons 远洋自然 Ocean Plaza 远洋广场 Ocean Times 远洋时代城 Contracted sales Amount (RMB mn) 260 2, GFA sold (sqm) 15, ,915 50,868 82, ,854 ASP (RMB/sqm) 16,300 13,800 4,300 10,600 11,500 7,900 Launch date 4Q07 4Q08 3Q08 2Q10 4Q10 4Q10 Attributable interest Shenyang Ocean Paradise 远洋天地 1, ,492 8,400 2Q08 Hangzhou Ocean Honored Chateau 远洋公馆 of Canal Business District 运河商务区 2,834 82,660 34,300 2Q10 51% Zhongshan Ocean City 远洋城 1, ,023 8,300 4Q07 Sanya Ocean Olympics 远洋奧林匹克公馆 ,617 19,400 4Q10 70% Chengdu Ocean Langjun 远洋朗郡 ,921 6,700 4Q10 Qinhuangdao Wan Hai Yi Hao 湾海一号 69 10,572 6,500 4Q10 Sub-total: 10, ,975 12,000 Parking lots in various projects ,791 3,800 Total: 21,603 1,660,223 13,000 31

32 Appendix 4: Projects for sale in FY11 Projects Beijing 北京 Time of new/subsequent launches Target GFA sold ( 000 sqm) Project type Attributable interest Ocean Great Harmony Area C 远洋万和城 C 区 1Q High-end residential, office Ocean Oriental (Tongzhou Yuqiao Project) 远洋东方 2Q Mid-range residential Poetry of River 远洋一方 ( 大型项目 ) 1Q Mid-range residential Ocean Landscape South 远洋沁山水南区 Last batch 30 Mid-range residential Ocean Palace (Yizhuang Sanyang Project) 远洋天著 2Q High-end residential Ocean Manor (Beiqijia Project) 远洋傲北 2Q Villas Ocean La Vie 远洋 La Vie 3Q Top-end villas 86% Tianjin 天津 Ocean City 远洋城 ( 大型项目 ) 1Q Mid-range residential Ocean Express 远洋新干线 1Q Mid-range residential 97.05% Ocean Great Harmony (Nihuangzhuang Project) 远洋万和城 2Q High-end residential Ocean Paradise 海河新天地 ( 远洋天地 AB 地块 ) 4Q11 3 Office 96.99% Ocean Prospect (Zhangguizhuang Project) 远洋风景 2Q High-end residential Dalian 大连 Ocean Worldview 远洋紅星海世界观 ( 大型项目 ) 1Q High-end residential, villas Ocean Seasons (Nanguanling Project) 远洋自然 Last batch 17 High-end residential, villas Ocean Midtown (Xishan Project) 远洋 Midtown 3Q Mid-range residential Ocean Times (University Project) 远洋时代城 1Q Mid-range residential Ocean Plaza (Zhonghualu Project) 远洋广场 2Q Mid-range residential Sub-total: 1,086-1,316 Continue on next page 32

33 Appendix 4: Projects for sale in FY11 (cont.) Projects Time of new/subsequent launches Target GFA sold( 000 sqm) Project type Attributable interest Shenyang 沈阳 Ocean Paradise 远洋天地 ( 大型项目 ) 2Q Mid-range residential, villas Hangzhou 杭州 Ocean Honored Chateau of Canal Business District 运河商务区之远洋公馆 2Q High-end residential component of large-scale multi-purpose Hangyimian Project 大河宸章 2Q Mid-range residential 70% Zhongshan 中山 Ocean City 远洋城 ( 大型项目 ) 1Q Mid to high end residential, villas Sanya 三亚 Ocean Olympics 远洋奧林匹克公館 1Q High-end residential 70% Chengdu 成都 Ocean Langjun (Hejiayan Project) 远洋朗郡 2Q Mid-range residential 51% Chongqing 重庆 Golf Club Project 国际高尔夫项目 3Q Mid to high end residential, villas 93.25% Wuhan 武汉 The Manor for You (Tangchen Project) 有座庄园 2Q High-end residential, villas and retail 55% Ocean World (Jinpan Project) 远洋世界 2Q Residential and villas 55% Qinhuangdao 秦皇岛 Ocean Century (Ocean New City) 远洋海世纪 3Q Mid-range residential Qingdao 青岛 Ocean Prospect (Fushan New District Project) 远洋风景 3Q Mid-range residential Sub-total: Total: 1,831-2,230 51% 33

34 Appendix 5: Land parcels acquired in FY10 Project Property type Attributable planned GFA * (sqm) Attributable land cost (RMB mn) Channel Average land cost (RMB/sqm) Time of acquisition Estimated year for sale Attributable interest Beijing 北京 Dawangjing 大望京 Residential, retail 211,000 4,264 Tender 20,209 1H10 1H12 CBD Plot Z6 中服 Z6 Office, retail 200,000 3,807 Tender 19,035 2H10 Under planning 80% Dalian 大连 Zhonghualu Project 中华路项目 Residential 404,000 1,230 Bidding 3,045 1H10 2H11 Diamond Bay Project 钻石湾项目 Xiaoyao Bay Project 小窑湾项目 Large-scale multi purpose 1,806,000 8,585 Tender 4,754 2H10 Hotel, serviced apartments, retail 180, Bidding 3,944 2H10 Under planning 90% Under planning Qingdao 青岛 Ocean Honored Chateau (Quanzhoulu Project) 远洋公馆 Residential 114,000 1,607 Tender 14,096 1H10 1H12 Ocean Prospect (Fushan New District Project) 远洋风景 Residential 145, Tender 5,745 1H10 2H11 Sub-total: 3,060,000 21,036 Continue on next page Note * Planned GFA subject to change during project planning. 34

35 Appendix 5: Land parcels acquired in FY10 (cont.) Project Property type Attributable planned GFA * (sqm) Attributable land cost (RMB mn) Channel Average land cost (RMB/sqm) Time of acquisition Estimated year for sale Attributable interest Tianjin 天津 Ocean Prospect (Zhangguizhuang Project) 远洋风景 Residential, retail 285, M&A 3,435 2H10 2H11 90% Ocean City additional land Plot C 远洋城 C 地块 Residential 41, Bidding 2,341 2H10 Under planning Sanya 三亚 Ocean Olympics 远洋奥林匹克公馆 Residential 37, M&A 15,649 1H10 4Q10 70% Tang Di Project 棠棣项目 Villas 7, M&A 28,000 1H10 Under planning 52.5% Shanghai 上海 Bond Castle (Luodian New town project) 远洋博堡 Residential 91,000 1,956 Bidding 21,495 2H10 1H12 Changchun 长春 Jingyue Project 净月项目 Residential 552, M&A 1,460 2H10 2H11 51% Qinhuangdao 秦皇岛 Ocean Century 远洋海世纪 Residential 1,359, ** M&A 724 2H10 1H11 Wan Hai Yi Hao 湾海一号 Residential 22, M&A 727 2H10 4Q10 Sub-total: 2,394,000 5,612 Notes * Planned GFA subject to change during project planning. Continue on next page ** Including resettlement fee 35

36 Appendix 5: Land parcels acquired in FY10 (cont.) Project Property type Attributable planned GFA * (sqm) Attributable land cost (RMB mn) Channel Average land cost (RMB/sqm) Time of acquisition Estimated year for sale Attributable interest Haikou 海口 Yexiang Village Project 盈滨半岛 Residential 40, Tender 7,425 2H10 2H11 70% Chongqing 重庆 Golf Club Project 国际高尔夫项目 Residential 338,000 1,237 Bidding 3,660 2H10 2H % Chengdu 成都 Ocean Langjun (Hejiayan Project) 远洋朗郡 Residential, retail 155, Bidding 1,316 2H10 2H10 Daci Project 大慈寺项目 Office, retail, hotel, and serviced apartments 192,000 2,003 Bidding 10,432 2H10 Under planning 50% Wuhan 武汉 Then Manor for You (Tangchen Project) 有座庄园 Ocean World (Jinpan Project) 远洋世界 Residential Residential 45, , M&A 919 2H10 1H11 55% Shenyang 沈阳 Baishanlu Project 白山路北项目 Residential, retail 137, Tender 2,577 2H10 1H12 Sub-total: 1,172,000 4,379 Total: 6,626,000 31,027 4,683 Note * Planned GFA subject to change during project planning. 36

37 Appendix 6: YTD new acquisitions (as at March 15, 2011) Project Property type Total Planned GFA * (sqm) Total land cost (RMB mn) Channel Average land cost (RMB/sqm) Time of acquisition Estimated year for sale Attributable interest Qingdao 青岛 Plot F of Fushanhou Project 浮山后 F 地块 Residential, retail 116, Bidding 6,600 Jan 1H12 Shanghai 上海 Luodian New Town A1-3 Project 罗店新镇 A1-3 Residential, retail 119, Tender 4,700 Jan Under planning Yanghangzhen Project 杨行镇项目 Residential 275,400 3,228 Tender 11,700 Jan Under planning Zhenjiang 镇江 Guantang Project 官塘项目 Residential, retail 657, M&A 1,100 Jan Under planning 50.05% Total: 1,168,300 5,243 4,500 Note * Planned GFA subject to change during project planning. 37

38 Appendix 7: Land bank analysis (as of Dec 31, 10) By city City Attributable GFA ( 000 sqm) Avg. land cost (RMB per sqm) Beijing 3,046 6,812 Tianjin 3,216 1,975 By time of acquisitions Time of acquisition Before TOTAL Attributable GFA mn sqm Dalian 6,238 2,128 Shenyang 643 1,399 Qingdao 259 9,421 Hangzhou 588 6,842 Huangshan 140 1,000 Zhongshan 1,360 1,011 Sanya 44 17,435 Changchun 552 1,459 As %of total land bank Avg. land cost per sqm (RMB) Notes: 14% 3 26% 3 8% 17% 35% 1,786 2,499 2,300 2,730 4,273 3,055 Chengdu 347 3,474 Chongqing 338 3,664 Qinhuangdao 1, Haikou 40 7,444 Wuhan GFA subject to change during project planning. 2. Included the increase in stake in Ocean Worldview and acquisition of two other projects in Dalian. The entire acquisition was completed on Jan 2, In 2007 and before, the group acquired lots of 800 k 2 mn sqm large scale projects Shanghai 91 21,495 Total 18,588 3,055 38

39 Appendix 8: Beijing project locations 39

40 Appendix 9: Dalian project locations Acquired in FY10 Existing projects Ocean Times IT Industrial Park Ocean Valley Lafite Ocean Seasons Ocean Midtown Xiaoyao Bay Project Ocean Plaza Diamond Bay Project Ocean Worldview Ocean Prospect Xiangsong Project 40

41 Appendix 10: Shanghai project locations Acquired in FY10 Acquired in FY11 LuoDian A1-3 1 Bond Castle (LuoDian F1-4 F1-6) YangHang G-2-1(A) Meilan lake Golf Course Outer Ring Road #7 Subway line North-South Highway 4 6 #1 Subway line MID Ring Road Hongqiao Intl Airport Pudong Intl Airport 41 41

42 Appendix 11: Debt structure Cost of fund in FY10 was 5.4%, same level as FY09. As of Dec 31, approved but unutilized credit facilities was RMB13.6bn. Period As of Dec 31, 10 (RMB mn) As of Dec 31, 09 (RMB mn) Change As % of total debt as of Dec 31, 10 Within 1 year 9,920 4, % 34% Between 1 and 2 years 11,062 7,019 58% 38% Between 2 and 5 years 6,184 6,359-3% 21% Over 5 years 2,030 3,809-47% 7% Total: 29,196 21,840 34% 42

43 Appendix 12: Issue of Perpetual Subordinated Convertible Securities (PCS) Issued in July 2010, raised USD900mn, subscribed by high quality and long-term holders and about 50% by our current second largest shareholder. Issued at premium (HK$6.85) with 8% distribution rate per annum that is discretionary and deferrable. Provides growth capital to Sino-Ocean and reduces leverage. No repayment obligation and no covenants. Lock up period is one year. 43

44 Appendix 13: Land supply for residential use in Beijing (incl. some retail space) Land supply for private housing GFA 000 sqm 23,930 RMB/sqm Transacted GFA of private housing 30,000 24,000 Land cost of GFA/sqm 20,059 25,000 ASP of private housing 20,000 20,000 15,000 10,000 5, ,102 2,797 7,647 19, ,423 10,646 16,953 3, ,753 11,384 3, , ,326 14,264 6,114 11,759 7,013 13,590 10, , , Jan-Feb 16,000 12,000 8,000 4,000 0 For years the private housing land supply has been far lower than the transacted GFA, but this year s land supply depends on the structure of Beijing s annual land supply plan. In the past several years, the gap between the private housing land supply and transacted GFA of private housing has been narrowing, but the ASP of private housing shot up very quickly. Source: 北京房地产交易管理网数据库, a Beijing government-run database and company research 44

45 Appendix 14: Beijing private housing supply (in GFA) 2,000 1,500 1, GFA of private housing supply ( 000 sqm) 495 Jan 09 1,241 1,185 1, , Apr Jul Oct 1,302 1, Jan ,003 1, Apr Jul 1,661 1,427 Oct Jan Feb 11 Monthly avg. in FY10 23,581 12,353 11,770-94% New housing supply in Jan and Feb 2011 was far lower than that in the same period last year Source: a Beijing government-run database and company research 45

46 Appendix 15: Beijing private housing transaction (in GFA) 2,000 1,500 1, ,729 1,874 1,904 1,751 1,587 1,804 1,482 1,509 1,469 1,776 1,012 1, Transacted GFA of private housing ( 000 sqm) 1, , ,479 1, Monthly avg. in FY09 Monthly avg. in FY10 0 Jan 09 Apr Jul Oct Jan 10 Apr Jul Oct Jan 11 Feb 23,581 supply in GFA transacted GFA 18,292 12,353 8,061-87% -94% 11,770 10, ,390 In the wake of new tightening measures, the transacted GFA has dropped sharply. Smaller units ranging 80-90sqm accounted for 22% - the largest proportion of the total units transacted in Jan and Feb Jan-Feb Source: a Beijing government-run database and company research 46

47 Appendix 16: Beijing private housing price trend FY09 FY10 FY % ASP in FY Jan 09 Apr Jul Oct Jan 10 Apr Jul Oct Jan 11 Feb The new measures introduced has no significant impact on housing price. Transacted GFA plummet right after the launch of new measures with no sign of price adjustment. At the moment, ASP is hovering around RMB24,000/sqm but still higher than that in FY09 and FY10. Source: a Beijing government-run database and company research 47

48 Appendix 17: Beijing public housing analysis 000sqm 20,000 15,000 10,000 5, % 1,334 1, ,376 Public housing supply in GFA Public housing transacted GFA 4% ,953 22% 8,036 3,911 2, % 1,655 2,054 Private housing transacted GFA Public housing as % of total transacted GFA 18,326 17% 15% 10,334 2,163 1, , Jan-Feb % Private housing is the main source of housing supply in Beijing. Since 2005, public housing has been accounting for only a small portion of the housing supply. The highest proportion was only 22%. Beijing government promised to build 136,000 units of public housing in But most of them will be for housing the lowest income group or for resettlement. Hence, impact on private housing sales would be limited. Source: a Beijing government-run database and company research 48

49 Appendix 18: Analysis of Beijing s private housing inventory digestion Month Month avg. in Month avg. in Jan 09 Apr Jul Oct Jan 10 April Jul Oct Jan MoM GFA sqm 22.1% (%) 5.1% 3.0% 3.7% 3.4% 0.2% 1.0% -0.5% -0.4% 0.1% -0.9% -2.3% -3.7% -7.7% The inventory level stayed at around 10mn sqm since the new measures launched in Jan Source: a Beijing government-run database and company research 0 Jan 10 Apr Jul Oct Jan 11 Feb

50 Appendix 19: China s new high-speed railway lines Harbin Changchun Shenyang Beijing Shijiazhuang Qinhuangdao Dalian Tianjin Lanzhou Taiyuan Jinan Qingdao Chengdu Baoji Xi an Suining Chongqing Zhengzhou Xuzhou Nanjing Huangshan Zhenjiang Yichang Hefei Shanghai Hangzhou Wuhan Ningbo Lichuan Wenzhou Changsha Nanchang Kumming Fuzhou Cities entered in 2011 Cities entered in 2010 Cities entered before 2010 Guangzhou Zhongshan Haikou Sanya Shenzhen Hong Kong Xiamen 50

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