Centraland 2 q2010 results presentation (aug 12 '10)

CentraLand Limited

CENTRALAND LIMITED

2Q2010 Results Presentation

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Contents

Overview of Zhengzhou

Company Portfolio

Financial Review

Commercial Projects

Residential Projects

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Business acquired by present management in November 2003

Focus on specialty wholesale trading hubs

Listed on the SGX Mainboard on Feb 1, 2008

Completed aggregate GFA of 226,718 sq m of commercial / residential space

Planned estimated GFA of additional 862,092 sq m to be completed by 2015

A Leading Zhengzhou-Based

Property Developer

Listing SGX Mainboard

Issued Share Capital 1,845,000,000

Free Float 13.3%

Share Price (As at Jul 2, 2010) S$0.435

Market Capitalisation

(As at Jul 2, 2010)S$802.58 mil

Net Asset Value Per Share (Jun 30, 2010)

77.92 RMB cents

Major Shareholders

Ember Vision (Mr Li Wei & Mr Wang Peng) –48.6%

Marble Focus (Mr Yan Tao) – 20.8%

CIM X Limited – 8.7%

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Regional GDP Ranking

Ranking RegionGDP

(RMB billion)*

1 Guangdong 3,569.6

2 Shandong 3,107.2

3 Jiangsu 3,031.3

4 Zhejiang 2,148.7

5 Henan 1,840.8

6 Hebei 1,618.9

7 Shanghai 1,369.8

8 Liaoning 1,346.2

9 Sichuan 1,250.6

10 Hubei 1,133.0*As at 2008

Sources: China Statistical Yearbook 2009, Zhengzhou Statistical Yearbook 2009

Zhengzhou’s GDP

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Overview of Zhengzhou

Capital city of Henan Province, one of China’s eight ancient capitals

Located in the central part of the PRC and south of Yellow River

Land area : 7,446 sq km

Key national transportation hub for the country’s rail, highway and air transportation

Intersection of two major trunk railways : North-South railroad line (Beijing-Guangzhou Railway) and East-West railroad line (Lanzhou-Lianyungang Railway)

Zhengzhou Railway Station is China’s largest odd cargo volume transit-shipment station and has the 2nd

highest volume of passenger transit in the PRC

Source: Zhengzhou Zhengdong New District Investment Environment Study 2009 (KPMG Shanghai)

Zhengzhou

Urumqi

Shanghai

Hong Kong

Beijing

Source: Zhengzhou Statistical Yearbook 2008

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Source: Google mapsSource: http://www.china-mor.gov.cn/

Connectivity in Zhengzhou

Located on the Beijing-Hong Kong-Macau Expressway which runs through China and the Lianyungang-Horgos Expressway, the longest West-East highway in China (1)

Henan’s expressway mileage : 4,841 km, highest amongst all Chinese provinces (1)

A total of 25 key trunk-line highways form a well-developed highway network linking Zhengzhou with other parts of PRC (2)

Sources: (1) Zhengzhou Zhengdong New District Investment Environment Study 2009 (KPMG Shanghai)(2) www.zynews.com

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“Central

City Cluster” -

Zhengzhou as

the centre of

development

Henan Provincial

Government

Zhengzhou : the Centre of Development

The “Central City Cluster” includes 8 cities within one-hour drive from Zhengzhou

Luoyang, Kaifeng, Xinxiang, Jiaozuo, Xuchang, Pingdingshan, Jincheng and Jiyuan

Integration of Zhengzhou and Kaifeng as a Mega-City to enhance the development of the “Central City Cluster”

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Guangzhou

Wenzhou

Yiwu

Zhengzhou

Zhengzhou : Links East to the West

Zhengzhou plays a crucial role in developing the Central and Western provinces

Relocation of coastal trading hubs to Zhengzhou to serve the Central and Western parts of China

Growth engine of domestic trade

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North Ring

Business

District

Railway

Business

District

Jiancai Gang

J-Expo I and II

Guancheng

Business

District

Erqi Business

District

Tianrong

Zhengzhou’s Specialty Trading Hubs

Wenhualu

Business

District

Bishagang

Business

District

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Company Overview

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Our Portfolio (Geographical location)

J-Expo I & II

Small consumer commodities wholesale trading hub

Tianrong Fashion City

Fashion apparel wholesale trading hub

Jiancai Gang

Wholesale centre for building materials

Property management services

Nongye Road

Border of old city centre and new CBD

Guoling Shanshui

25km or 20 mins drive from Zhengzhou City centre

5km south of Yellow River, where the Yellow River Scenic Area is located

N

Guoling Shanshui

Tianrong

Zhengdong New CBD

J-Expo I & II

Nongye Road

Jiancai Gang

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Our PortfolioLand Bank/ Site Area

(sq m)

Saleable/Planned

Estimated GFA

(sq m)

Remarks

Completed property

Commercial property

J-Expo I (金智万博商城 I) 9,771 65,890 Sold and delivered 76.3% of

saleable GFA

(As at 31 Mar 2010)

Property under development Estimated Construction

Schedule

Residential property

Phase III of Guoling Shanshui (果岭山水)

Remaining land bank at Guoling Shanshui

174,412

1.5 mil

132,000

TBA

2Q 2009 – 4Q 2012

--

New projects

Commercial properties

J-Expo II (金智万博商城 II) 8,139 82,000 3Q 2010 – 1Q 2012

Tianrong Fashion City (天荣时装城)

Old Residential Area, adjacent to Tianrong Fashion City

(旧住宅区)

27,1901

20,0012

550,0003 1Q 2011 – 4Q 2015

Mixed residential & commercial property

Nongye Road Project (农业路项目) 16,123 100,092 3Q 2010 – 3Q 2012

Property Management

Jiancai Gang (建材港) 758,574 354,568

Tenure of 20 years:

11 Nov 2009 – 30 Jun 2028

1 Entered into a sale and purchase agreement to acquire land occupying 15,081 sq m; acquired the balance 12,109 sq m in 2Q 2010

2 Acquisition expected to take place in 4Q 2010

3 Based on amalgamated site area of Tianrong Fashion City and Old Residential Area

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Financial

Review

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Income StatementRMB ’mil 1H2010 1H2009 Change

Revenue 60.9 84.4 - 27.8%

Gross Profit 40.7 49.1 - 17.2%

Other Income 1.3 1.2 + 12.7%

Profit Before Tax 5.2 27.6 - 81.0%

Net Profit 4.1 10.0 - 59.1%

Selling Expenses 3.9 4.2 - 6.3%

Admin Expenses 26.1 16.3 + 60.0%

Effective Tax Rate 21.5% 63.6% - 42.1 ppt

Gross Profit Margin 66.8% 58.2% - 8.6 ppt

Profit Before Tax Margin 8.6% 32.7% - 21.2 ppt

Net Profit Margin 6.7% 11.9% - 5.2 ppt

1H: Six months ended 30 June

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Income StatementRMB ’mil 2Q2010 2Q2009 Change

Revenue 31.0 20.6 + 50.8%

Gross Profit 20.0 12.7 + 57.8%

Other Income 0.6 0.7 - 17.1%

Profit Before Tax 1.9 5.6 - 66.6%

Net Profit 1.3 2.0 - 33.7%

Selling Expenses 1.6 1.6 + 3.5%

Admin Expenses 13.6 5.0 + 170.4%

Effective Tax Rate 30.3% 64.8% - 34.5 ppt

Gross Profit Margin 64.6% 61.8% + 2.8 ppt

Profit Before Tax Margin 6.0% 27.2% - 21.2 ppt

Net Profit Margin 4.2% 9.6% - 5.4 ppt

2Q: Three months ended 30 June

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20.6

31.0

0.0

10.0

20.0

30.0

40.0

50.0

2Q2009 2Q2010

Revenue

Revenue2Q2010 vs 2Q2009

Revenue increased from RMB20.6 mil in 2Q2009 to RMB31.0 mil in 2Q2010

RMB2.0 mil recognised from delivery of 3 retail and 3 office units in J-Expo

RMB29.0 mil contributed from rental income and property management fees

Rental income increased from RMB5.0 mil in 2Q2009 to RMB22.5 mil in 2Q2010

Leasing out of commercial retail units in Guoling Shanshui to third-party*

Sub-leasing of space within Jiancai Gang

Property management fee contribution of RMB6.5 million

2Q: Three months ended 30 June

RMB’mil

* Group re-purchased some commercial retail units in 2H2009: leased to third-party operator for an annual rent of RMB6 m

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Revenue Breakdown

Rental Income

72.5%

Rental Income

24.4%

J-Expo I

Retail Units

75.6%

2Q2009 2Q2010

Property

Management Fee

21.1%

J-Expo I

Retail Units

6.4%

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Gross Profit, PBT & Net Profit

12.7

1.3

20.0

1.9

5.6

2.0

0

5

10

15

20

25

2Q2009 2Q2010

Gross Profit PBT Net Profit

RMB’mil Gross Profit

Increased from RMB12.7 million in

2Q2009 to RMB20.0 mil in 2Q2010

GP margin increased 2.8 ppt to 64.6%

Higher gross margins from rental income and property management fees compared to sales of properties

PBT

Decreased to RMB1.9 mil in 2Q2010

Net Profit

Decreased to RMB1.3 mil in 2Q2010

Effective tax rate of 30.3% in 2Q2010

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* Based on post-Invitation share capital of 1,845,000,000 Shares

Balance Sheet Highlights

RMB’mil As at 30 Jun 2010 As at 31 Dec 2009

Cash & Bank Balances 429.1 938.9

Net Assets 1,437.7 1,383.2

- Properties Held for Development 1,469.0 783.6

- Properties Held Under Development 182.6 138.9

- Properties Held for Sale 69.1 70.7

- Deposits Paid 150.0 120.0

Receipts in Advance (140.3) (46.3)

Interest-bearing Bank & Other Borrowings (523.0) (617.0)

Net Gearing Ratio (times) 0.07 Net cash

NAV per Share (RMB cents) * 77.92 74.97

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Commercial Projects

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J-Expo I (金智•万博商城 I)

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Status of J-Expo I (金智•万博商城 I)

As at 30 June 2010

*302 units of the unsold units on level 4 and 5 were rented out as at 30 June 2010.

LevelsCompletion

Date

Total

Saleable

GFA (sq m)

UnitsNo of Units

Sold*

No of Units

Delivered*

% of GFA

Sold &

Delivered

Average

ASP/unit

(RMB/sqm)

B1, L1-L3 2Q 2008 36,2821,792 retail

units1,691 1,679 17,132

L4-L5 2Q 2008 18,297768* retail

units464 451 11,379

L6-L12 2Q 2008 11,311192 office

units147 147 6,113

Total 65,890

2,560 retail

units/192

office units

76.7%

(50,555 sq m)14,226

23.3% GFA for

lease

76.7% GFA sold

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J-Expo II (金智•万博商城 II )

Rate of

registration

of interest:

263.1%

Expected

start of

construction:

3Q 2010

Expected

completion:

1Q 2012

As at 4 August 2010, rate of registration of interest at soft launch for J-Expo IIwas 263.1%

• The Group received 6,578 down-payments to ballot for J-Expo II’s 2,500retail units

• Pre-sales expected to start in second quarter of 2011

J-Expo II

J-Expo I

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Tianrong Project

Zhengzhou Railway Station

Zhengzhou Long

Distance Bus Station

J-Expo I

J-Expo II

Acquisition of J-Expo II site located in

Erqi District (二七区) for RMB150 mil

In response to strong market demand following

success of J-Expo I

Total site area of 8,139 sq m

Adjacent to existing J-Expo I

Strategic location

Within walking distance to Zhengzhou Railway

station and Zhengzhou Long Distance Central

Bus Station

Located within the main wholesale centre of

Zhengzhou City

Total saleable GFA of 82,000 sq m

Retail space: 67,000 sq m

Office space: 15,000 sq m

Retail Trading Hub (Erqi District)

Commodities Trading Hub (Railway District)

Fashion Trading Hub (Guancheng District)

J-Expo II (金智•万博商城 II )

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Tianrong Fashion

City

Old Residential

Area

Zhengzhou Long

Distance Bus Station

Zhengzhou Railway Station

Tianrong Project (天荣时装城)

Strategic location

Close proximity (less than 1km) to Zhengzhou Railway Station & Zhengzhou Long Distance Central Bus Station

Located within the fashion trading hub

Total site area

27,190 + 20,001 = 47,191 sq m

Comprises of Tianrong Fashion City and Old

Residential Area

Planned saleable GFA of 550,000 sq m


Office space: 180,000 sq m

For lease to generate rental income: 230,000 sq m

To be developed in stages over 5 yrs

Construction expected to commence in 1Q 2011

Landmark project in Henan Province

To be fully integrated with supporting infrastructure

Bus station in basement

Ample carpark facilities

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Tianrong Project – Acquisition Status

Tianrong Fashion City:

27,190 sq m

Total land cost: RMB1 billion

Old Residential

Area:

20,001 sq m

Total intended

acquisition site:

47,191 sq m

Stage 1:

15,081 sq m

(2 land parcels)

Stage 2:

12,109 sq m

(2 land parcels)

• Acquired Henan

Hezhi Co., Ltd. for

RMB440 mil

- Holds 80%

stake in 2 land

parcels

• Funded by IPO

proceeds and

internal funds

• Acquired

Zhengzhou

Longma

Enterprise Co.,

Ltd for RMB360

mil in 2Q2010

- Holds 80%

stake in 2 land

parcels

• Funded by IPO

proceeds and

internal funds

• Adjacent site to

Tianrong Fashion

City

• Land cost subject

to government

auction

• Expected to take

place in 4Q2010

• To develop into

an integrated

commercial

development

over a 5-year

period

The Group

holds 80%

stake in

the JV

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Jiancai Gang (建材港)

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Zhengzhou Tiandi Renhe acquired the master tenancy of Jiancai Gang on 30 Nov 2009

Annual rent of RMB24 million Duration of 20 years (Expiry on 30 June 2028) First right of refusal to renew tenancy

Jiancai Gang : Wholesale Centre for building materials

Within North Ring Trading Hub: one of Zhengzhou City’s 6 largest trading hubs

Focuses mainly on the wholesale of automobile parts and building materials

Has approx 1,300 tenants and approx annual turnover of approx RMB1 billion

Aggregate gross floor area : 354,568 sq m Site area : approx 758,574 sq m

Reinforces capabilities in management of commercial properties, esp specialty wholesale trading hubs

Jiancai Gang (建材港)

The Group holds 80% of Zhengzhou Tiandi Renhe

Two new stable income streams:

Sub-leasing

Property management

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Jiancai Gang

North Ring Business District

Jiancai Gang (Geographical location)

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Nongye Road (农业路)

Expected start of construction:

3Q 2010

Expected completion:

3Q 2012

Site cleared for construction

Artist Impression

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Nongye Road Project

Nongye Road (农业路)

Acquisition of Nongye Road site

for RMB70 mil

Total site area of 16,123 sq m

Strategic location

At the boundary of the old city centre’s

business district and the new

Zhengdong CBD

Planned total saleable GFA

of 100,092 sq m


Residential units: 84,685 sq m

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Residential Projects

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Phase I

Yongfu 雍府

Phase I

Mufu 睦府

Phase III

Guoling Shanshui (果岭山水)

Remaining site area of 1.5 mil sq m held for future development

Phase I & II (Completed and fully sold)

Phase I: GFA of approx 57,954 sq m

Phase II: GFA of approx 102,874 sq m

Phase III – Total GFA of 132,000 sq m

Stage 1: GFA of approx 43,000 sq m; construction underway

Stage 2 GFA of approx 89,000 sq m; construction expected to start in FY2010

Phase IIXinyu Lanwan

心屿澜湾

Phase II

Huguang Shanse

湖光山色

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Remaining land bank

(1.5m sq m)

9%

76%

15%


Phase III & Beyond

Phase III development on track

Site area of 174,412 sq m

Stage 1 construction underway

• Pre-sales launched in late October

• Saleable GFA of 43,763 sq m

Stage 2 construction expected to commencein FY2010

Saleable GFA of 89,000 sq m

Remaining land bank

Total site area of 1.5 mil sq m

Land Bank (Site Area)

Phase III (Development on track)

(174,412 sq m)Phase I & II

(Completed)

(276,735 sq m)

Phase III Type of unitTargeted

Completion Date

Total Saleable

GFA (sq m)Units

No of Units Sold*

% GFA SoldAverage ASP/unit

(RMB/sqm)

Stage 1Low-rise

apartments

4Q2012

43,763 540 29554.6%

(24,977 sq m)6,145

Stage 2Townhouses/

Duplexes/ Commercial units

89,000Under

planning- - -

*As at 4 August 2010

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Remaining Land Bank

1.5 million sq m

Master Plan

Approved for development in phases

Lifestyle Development

Luxury holiday homes

Part of land bank leased out to third parties for complementary facilities

Golf course

Hotel

Commercial retail units


Phase III & Beyond

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Guoling Shanshui (果岭山水) Phase III

Artist Impressions

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Guoling Shanshui (果岭山水) Phase III

Construction underwayAs at Mar 2010

Show unit interiors

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Project Pipeline

20152009 2010 2011 2012 2013 2014

Guoling Shanshui Phase III

J-Expo II

Tianrong Project

Nongye Road Project

Property under development

New projects

Jiancai Gang Project

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Project Pipeline – Total GFA

Uses Saleable/Planned Estimated GFA (sq m)

Residential

- Guoling Shanshui Phase III

- Nongye Road

216,685

132,000

84,685

Retail

- J-Expo II

- Tianrong Project

- Nongye Road

211,407

67,000

140,000

15,407

Office & Commercial

- J-Expo II

- Tianrong Project

204,000

15,000

180,000

For Lease (Rental Income)

- Tianrong Project

230,000

230,000

Property Management

- Jiancai Gang

354,568

354,568

Total : 1,218,660 sq m

CentraLand Limited

CENTRALAND LIMITED

Johnson Choo

Vice President

Investor Relations and Corporate Communications

Mobile: +65 94506527 / +8615838381086

Email: [email protected]

Thank You