Evergrande to list spin-off units in HK
Updated: 2015-03-31 08:05
By Sophie He in Hong Kong(HK Edition)
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Evergrande Real Estate Group Ltd - the mainland's second-largest property developer by sales - plans to spin off its three non-core businesses and have them listed in Hong Kong in about three years.
Chief Executive Xia Haijun said on Monday as the company announced its annual results that Evergrande's three new businesses - the production of spring water, grain and oil as well as dairy items - are expected to be spinned off and go public in Hong Kong.
The company, he said, will continue to invest in these new businesses in the next three years to help them grow, and plans to invest 2 billion yuan ($322.3 million) this year, 1.5 billion yuan in 2016 and 1 billion yuan in 2017.
Chairman Xu Jiayin said the company has invested more than 5.5 billion yuan so far in its spring water business.
Last year, the sector saw sales of 1.09 billion yuan, while the total loss of its spring water business during the year was 2.3 billion yuan.
The company's sales target for spring water in 2015 is 4 billion yuan, and production capacity will be significantly enhanced.
Evergrande posted revenue of 111.4 billion yuan for the year ended Dec 31, 2014 - up 18.9 percent from a year ago. Its core business profit rose by 16.5 percent from 2013 to 12 billion yuan while profit attributable to shareholders was flat at 12.6 billion yuan.
A final dividend of 0.43 yuan per share has been recommended.
Xu said Evergrande's contracted sales target for 2015 is 150 billion yuan, and is "very confident" of achieving this target, as he believed the company is very well positioned in the mainland market and its products are selling at reasonable prices.
"Evergrande had never missed its annual contracted sales target before. We have every confidence in reaching our target this year, as there are rigid demands for housing in the country and we are well placed to meet those demands."
In 2014, Evergrande's contracted sales reached 131.5 billion yuan - 31 percent more than in 2013. During the year, it recorded an average selling price of 7,227 yuan per square meter, which is also 7.2 percent higher than a year ago.
By the end of 2014, Evergrande's net gearing ratio was 85.9 percent. The company's chief financial officer Tse Wai-wah said it will continue to make efforts to reduce this ratio, with a mid-term target for its net gearing ratio of about 70 percent.
Evergrande's share price rose 6 percent to close at HK$3.92 in Hong Kong on Monday.
sophiehe@chinadailyhk.com
(HK Edition 03/31/2015 page8)