Country Garden, which skyrocketed at the end of last year, now seems to be going downhill.。

At noon on March 30, Country Garden released its 2022 annual results announcement.。Country Garden's 2022 revenue reaches 4,303, according to earnings data.700 million yuan (RMB, the same below), down 17.7%; gross profit of 328.800 million yuan, the company's shareholders should account for the core net profit of about 26..100 million yuan, full-year net loss of 60.5.2 billion yuan, year-on-year profit and loss, net profit of 267% in the same period last year..$9.7 billion。

Real estate development is a serious drag on revenue. 700,000 units will be delivered in 2022, still ranking first in the industry.

Country Garden noted that in 2022, the company's revenue was approximately 4,303.700 million, compared with about 5,230 in 2021..600 million yuan down about 17.7%。The real estate development and construction segment is the main source of revenue for Country Garden, with real estate property sales accounting for 97% of revenue.。

The company said that in 2022, revenue from real estate development increased from approximately 5,074 in 2021 due to the impact of the new crown epidemic slowing the progress of project completion and settlement..7.8 billion yuan down 17.8% to about 4172.9.6 billion yuan。The average sales price (excluding VAT) of revenue recognized for the delivery of properties in 2022 is approximately RMB7,592 per square meter.。In addition, external construction revenue is also increased by approximately 93 in 2021..6 billion yuan down 19.1% to about 75% in 2022.6.8 billion yuan, mainly due to a decrease in construction due to the new crown epidemic。

Although property development and construction were a heavy drag on Country Garden's annual report data last year due to the poor performance of the epidemic, overall, Country Garden's performance remained solid。

According to the annual report, the company achieved a total of approximately 3,574 equity contract sales for the year..700 million yuan, equity contract sales area of about 44.5 million square meters.。The total elimination rate for the year was 65%, and the amount of equity refunds was approximately RMB3,324..800 million yuan, the return rate of equity sales was 93%, reaching more than 90% for 7 consecutive years.。Good sales return ability is the key to real estate enterprises back to blood, Country Garden in the key to force, can be said to successfully hold the bottom line of business。

In addition, at a time when overall real estate demand is weak and overall performance is less than expected in 2022, Country Garden, together with its joint ventures and associates, still delivers nearly 700,000 homes, topping the industry in terms of deliveries.。

 

All for "cash flow"! Country Garden is working together to improve its cash flow position.

As a highly indebted industry, the health of its capital flows is a top priority。In the face of a big drop in revenue, in order to maintain a stable capital operation, Country Garden can be said to have taken great pains。

First, in terms of debt and financing, the company has further optimized its internal structure。As of the end of the reporting period, the Company's total borrowing balance decreased to RMB2,713.100 million yuan, down 14.7%; gearing excluding prepayments continued to decline from 81% in mid-2020 to 69.4%; net debt ratio further reduced to 40%, compared with the end of last year to optimize 5.4 percentage points, the lowest in a decade。In addition, Country Garden will pay all its debts due during the year without any default or delay in payment of principal and interest, in order to avoid worries.。

Secondly, as the head brand of China's real estate industry known for its "careful calculation," Country Garden continues its principle of "precision and prudence" in land acquisition.。In 2022, the company acquired low-premium land in Foshan, Zhangjiakou, and Lanzhou, respectively, in 2022.。As of the end of the year, the company's equity saleable resources were approximately $955.5 billion。

Finally, in order to improve its cash position, Country Garden is united in its efforts to actively expand various financing channels.。In 2022, Country Garden successfully issued nearly 10 billion yuan of corporate bonds, medium-sized bills, ABS, convertible bonds and other direct financing products, completed three equity financing, a total of about 11.5 billion Hong Kong dollars, more than 10 banks more than 300 billion yuan of comprehensive credit support.。In addition, the company also actively self-help, the controlling shareholder, management through the secondary market to purchase corporate bonds and senior notes, to provide interest-free and unsecured loans and other ways to support the company, of which the majority shareholder to provide interest-free unsecured loans for the company 50..HK $5.5 billion。

Under the company's "arduous" struggle, Country Garden finally handed over a relatively satisfactory "cash flow answer."。In its annual report, the company noted that as of the end of last year, it had a total available cash balance (the sum of cash and cash equivalents and restricted cash) of approximately RMB1,475..500 million, of which cash and cash equivalents amounted to approximately RMB1,282 million..8.1 billion yuan, restricted cash is about 192 yuan..6.9 billion yuan。

The company's management said that it will continue to maintain a full cash flow in the future to meet the opportunities and challenges brought about by market changes.

Performance Conference Country Garden Wants to "Turn Gun" Points to First- and Second-tier City Companies Already Restart Land Acquisition Plan

On March 30, Country Garden held its 2022 annual results meeting, and Yang Huiyan, who had just taken over as chairman of Country Garden in early March, made her debut.。

Yang Huiyan said at the meeting, the future of Country Garden's strategic direction is still stable and far-reaching, in the layout, the future of Country Garden will be from the original emphasis on three or four lines layout, to a second line and three or four lines "five open" layout.。

Country Garden President Mo Bin said that in 2022 Country Garden paid a heavy price on the income statement, a number of earnings indicators under pressure, full-year revenue of 4303.700 million yuan, down 17.7%, in the face of market uncertainty, the company's gross profit fell sharply year-on-year, while the impact of the appreciation of the U.S. dollar, the company also formed a large exchange loss during the year.。

Executive Vice President Cheng Guangyu said the company has restarted land acquisition。For the land budget, Cheng Guangyu said, Country Garden in the past to take land conservative, generally will be 40% of the sales amount for land, but this year's land budget will be based on the actual sales situation, market opportunities to make arrangements.。

In addition to keeping the main real estate business stable and far-reaching, Country Garden revealed that in the future will continue to make efforts to build the business and technology sector business, opening up the second growth curve.。The company said that in 2022, the company has actively engaged in construction robots and technology wisdom construction business, has set up the establishment of Guangdong Bozhilin Robotics Company, Science and Technology Construction Group, to explore construction robots as the core, construction robots + BIM technology + assembly and new system of science and technology construction solutions.。In addition, combined with its existing real estate development and construction business, the company has invested 21% of its research and development expenses in 2022..600 million yuan。

Bank of America: It's hard to judge the success rate of its move to first- and second-tier cities

After the performance, Bank of America published a research report saying that Country Garden is currently focusing on improving the quality of product design and cost control measures, the development direction is correct, the company has plans to shift the focus of development to first- and second-tier cities, but as most developers in the industry will focus on first- and second-tier cities, it is difficult to judge the probability of success at this stage.。

The bank added that although Country Garden has now begun to participate in land auctions in first- and second-tier cities, it is expected to face challenges in replenishing its high-quality land reserves recently due to tighter liquidity, and believes that the current valuation is not attractive relative to its peers.。As a result, the bank reiterated its "outperform" rating and lowered its price target from 3.HK $1 down to 2.HK $6。

Despite the Bank of America's criticism of Country Garden, the policy winds seem to be blowing in its favor。

The Central Economic Work Conference held in December last year stressed the need to ensure the steady development of the real estate market, do a solid job of guaranteeing the delivery of buildings, people's livelihood and stability, meet the reasonable financing needs of the industry, and effectively prevent and resolve the risks of high-quality head real estate enterprises.。

Since the beginning of the New Year in 2023, more positive policy signals from the property market are continuing to be released, with the head of the Ministry of Housing and Urban-Rural Development saying that it will defuse risks by "precision bomb disposal," support high-quality state-owned real estate enterprises and high-quality private real estate enterprises, improve their assets and liabilities, and meet their reasonable financing needs.。

From a policy perspective, the "property market haze" will slowly dissipate。Country Garden's "hard work" last year was not easy, but it's unsustainable in the long run.。Looking ahead, if you want to go further, I'm afraid Country Garden still has to move from expanding its revenue hand.。

Country Garden day down 5 as of press time.26%, reported 2.HK $16。