Chinanews.com, August 31. Currently, major listed companies are intensively releasing their 2020 interim results. With many financial data showing good results, Sunac has maintained stable performance, reduced debt, and acquired less land. The development of the company shows that the company is precise and appropriate in grasping the market environment and implementing policies in accordance with the situation.
On the whole, Sunac maintained a steady growth in performance in the first half of the year. Among them, in terms of capital structure and land acquisition strategy, Sunac has shown strong competitiveness, which makes developers in the same industry enviable.
In fact, behind the brilliant performance data is Sunac’s strategy of pursuing endogenous growth. Through the control of the external environment, the company can maintain stable and healthy development. In fact, since 2019, Sunac has been committed to the implementation of this strategy, including controlling the pace of land acquisition, adjusting the financing structure, significantly reducing the debt ratio, and reducing financing costs.
Sunac·Jiangnan No.1 Hospital
Optimized capital structure, net debt ratio dropped by 23%
Although experiencing the impact of the epidemic in the first half of the year, major companies gradually made efforts in April and May to make up for the sales difficulties caused by the epidemic. Even so, from the perspective of Sunac alone, it is rare to maintain its sales capacity during the same period in the first half of 2020.
Data shows that Sunac's contracted sales amount in the first half of the year was 195.27 billion yuan, and it currently ranks fifth among real estate companies. Since May, the performance has maintained a momentum of monthly increase. In July alone, Sunac recorded a contracted sales amount of 52.25 billion yuan, a significant increase of 26.97% year-on-year. Not only laid a good foundation for the start of the second half of the year, but more importantly, it confirmed the restoration of market sales confidence.
While achieving steady growth in performance, Sunac has further optimized its capital structure, increased net assets, and reduced debt ratio and financing costs, which are also important indicators of the competitiveness of listed companies.
According to data provided by Sunac, in the first half of 2020, Sunac’s owner's equity was 133.9 billion, an increase of 17.4% from 114.1 billion at the end of the previous year; the equity attributable to company owners was 97 billion, an increase of 16.7% from 83.1 billion at the end of the previous year. . While the net assets are rapidly increasing, the net debt ratio has dropped significantly by 23%, and the group's new financing costs have dropped significantly by 1.9%. As of the end of the reporting period, the group had a cash balance of 120.9 billion, with sufficient liquidity.
According to market rumors, relevant regulatory authorities will issue new regulations to control the growth of interest-bearing debt of real estate companies and set up "three red lines." It can be seen that Sunac’s development strategy of actively controlling leverage, reducing financing costs, and ensuring high-quality and stable growth since last year is highly consistent with policies and guidelines.
Sunac Ningbo House
The total value of land reserves has exceeded 3 trillion yuan
The most important thing in real estate is "money" and "land". Judging from the performance in the first half of the year, Sunac has guaranteed ample "money" in terms of revenue and cash flow, while in the land market, Sunac has shown rare "stability" and "slowness".
Judging from the first half of this year, the land market in some popular areas and cities is hot, and land costs are rising. In this regard, Sunac seized the opportunity in the land market and supplemented a small amount of land at a reasonable price, which was a significant drop of 64% year-on-year, fulfilling its development strategy of strictly controlling land acquisition.
The 64% drop is not a small number. So is Sunac lagging behind in land reserves? According to Sunac, as of the date of the performance announcement, Sunac has confirmed land reserves with a total value of more than 3 trillion yuan, a total area of more than 250 million square meters, and an average land cost of 4,312 yuan per square meter. About 80% of the value is located in High-energy first- and second-tier cities.
In fact, from 2010 to the end of June 2020, the value of Sunac’s land bank increased from 87.6 billion yuan to 3 trillion yuan, a 33-fold increase. Facts have proved that Sunac has always been good at grasping the pace of land acquisition. Accurate judgment on the land market and accurate and efficient land investment are the core competitiveness of Sunac to stand out in the fierce competition in the industry.
In Sunac’s view, among the large-scale real estate companies, Sunac owns the most high-quality land reserves, which will effectively guarantee the group’s steady increase in market size in the coming years. Therefore, Sunac now has no land anxiety and can more easily adjust its land acquisition strategy according to the situation and environment.
It is understood that Sunac has entered the development stage of focusing on profit management strategies and strengthening refined management. According to the development requirements of this stage, in the first half of 2020, Sunac will strengthen refined operation and management in multiple dimensions and continue to consolidate land investment. Based on the advantages of, products and services, we will build a profit-centric management system, and adjust and optimize the organizational structure and assessment mechanism to enhance comprehensive competitiveness and further increase the safety mat of the enterprise.
In the second half of the year, Sunac's saleable value was as high as 621.3 billion, and it is full of confidence in completing its annual performance target. At the same time, standing at the new starting point of the company's tenth anniversary of listing, Sunac has made outstanding achievements in real estate development, property management, and cultural tourism. To this end, the Shell Research Institute believes that Sunac's multi-business development and property splitting and listing can help Sunac to enhance its overall anti-risk ability, enrich its evaluation dimensions, and get more attention in the capital market.