On August 30, 2022, Agile Group Holdings Co., Ltd. (stock code 3383.HK, hereinafter referred to as "Agile") released the results announcement for the first half of 2022.
According to the mid-term report, as of June 30, 2022, Agile has achieved a total pre-sale amount of RMB 39.45 billion; although there is a certain decline following the general trend of the industry, the continued positive trend remains unchanged.
As of June 30, 2022, Agile achieved an operating income of 31.645 billion yuan, and the revenue structure was further optimized.
According to the data, Agile's operation model of "mainly real estate and coordinated development of diversified businesses" continued to show results. Property development and diversified businesses recognized revenue of RMB 23.776 billion and 7.869 billion respectively, accounting for 75.1% and 24.9% of the revenue respectively.
Among them, the revenue of diversified businesses increased by 8.1 percentage points compared with the same period of last year, and the income of property management increased by 31.7% compared with the same period of last year, which continued to provide Agile with stable income.
With the repayment of multiple debts as scheduled, the deleveraging effect began to appear.
As of June 30, 2022, Agile's total borrowings were 70.2 billion yuan, a decrease of 13.704 billion yuan compared with December 31, 2021; the net debt ratio was further reduced to 48.3%, a decrease of 2.5 percentage points compared with the end of last year; short-term borrowings decreased 23.6%.
In addition, a number of indicators related to the company's operating conditions continued to be optimized: the operating cash flow in the first half of the year was 4.3 billion yuan, which remained positive; sales and marketing costs and administrative expenses decreased by 450 million yuan, a year-on-year decrease of 14.2%.
Sustained financial stability, significant de-leveraging effect and good solvency
In the first half of 2022, Agile continued its previous stable financial strategy. In the context of the overall contraction of the industry's financing environment and the increased volatility of the capital market, by strengthening cash flow management and rationally arranging debt repayment plans, it has achieved various maturities in the first half of the year. All debts were repaid on time, demonstrating good corporate credit and solvency.
These included the redemption of US$500 million of 6.7% senior notes in March; the full repayment of the 2018 syndicated loan balance of HK$3.345 billion and US$60 million in May; and the repurchase and full resale of the principal in May 1.45 billion 5.9% public onshore corporate bonds totaling 692 million yuan, which matures in 2024.
With the on-time repayment of various debts and active financial control, Agile's loan scale, leverage ratio and financing costs have all declined significantly in the first half of 2022.
As of June 30, 2022, the company's total borrowings further decreased by RMB 13.704 billion, a decrease of 16.3%; the net gearing ratio was further reduced to 48.3%, and the actual borrowing rate fell to 5.59%.
Stable cash flow is the key to ensuring Agile's orderly operation and rapid business development. In the first half of the year, Agile further consolidated and optimized its financial margin of safety through multi-channel financing and active cash flow management.
In terms of financing, Agile obtained a mezzanine financing with a total principal amount of HK$894 million due in 2024 through the King's Road Mount Parker Road Project Company in Hong Kong in June; and signed a supplementary agreement on preferential financing, the total principal amount of the syndicated term loan is HK$825 million, while extending the maturity date of the existing syndicated term loan to 2024.
With the advancement of various measures, Agile's financial structure has also continued to be optimized.
As of June 30, 2022, Agile's total cash and bank deposits amounted to RMB 25.925 billion.
The sales continued to develop, the layout advantages were prominent, and the project delivery was in good condition
Under the strategy of focusing on the main business of real estate, in the first half of 2022, Agile achieved good sales performance through measures such as continuous optimization of marketing strategies and appropriate adjustment of available resources in various regions.
As of June 30, 2022, Agile achieved a pre-sale value of RMB 39.45 billion, a pre-sale area of 3.07 million square meters, and an average pre-sale price of RMB 12,848 per square meter.
While sales continued to grow, Agile also showed good development prospects thanks to its good regional layout and relatively high-quality land reserves.
As of June 30, 2022, Agile has a total land reserve of 43.49 million square meters, distributed in 81 cities, which can support the development in the next four to five years.
In terms of layout, Agile mainly focuses on two high-energy urban agglomerations in the Greater Bay Area and the Yangtze River Delta.
Among them, the land reserve in the Greater Bay Area is about 10.55 million square meters, accounting for 24.3% of the overall land reserve, and currently has 51 development projects; in the Yangtze River Delta, it has a land reserve of 5.29 million square meters, accounting for 24.3% of the overall land reserve. 12.2%, currently owns 47 development projects; in Hong Kong, it owns two high-quality real estate projects, including King's Road Mount Parker Road project and Kowloon Tong Yiben Road project, with a total land reserve of about 20,389 square meters.
As the two core urban agglomerations continue to release development potential in terms of industrial development and population growth, they will provide Agile with long-term and stable sales and revenue support.
In addition, as an important part of the company's stable operation, under the strategic requirements of "guaranteing nodes, bottom lines, and quality" formulated by the company, Agile's 75 projects were delivered on schedule in the first half of the year, with 27,000 units delivered and a delivery area of 254 square meters. Ten thousand square meters.
The proportion of income from diversified businesses has increased again, and the "second growth curve" has initially entered the harvest period
In the first half of 2022, the operation model of "focusing on real estate and coordinated development of diversified businesses" continued to bear fruit. Agile's property management and other businesses (including environmental protection and commerce) continued to exert synergies, contributing to Agile's stable cash flow at the same time. , and also promote the further optimization of the company's revenue structure.
As of June 30, 2022, Agile's revenue from diversified businesses was 7.869 billion yuan, accounting for 24.9% of its revenue, an increase of 8.1 percentage points year-on-year.
Among them, the performance of elegant living in the property sector is particularly outstanding.
In the first half of 2022, Ya Life actively responded to market cycle fluctuations and adjusted its business strategy flexibly. During the period under review, it successfully obtained a number of high-quality non-residential projects, including the Beijing Winter Olympics and other major international event venue projects, which fully demonstrated Full-format service capabilities and industry-leading brand influence.
As of June 30, 2022, the area under management and the contracted area of Ya Life were 528.6 million square meters and 706.5 million square meters, respectively.
Among them, the expansion area of the third-party market of Ya Life continues to rank in the forefront of the industry, showing sustainable growth resilience.
Rapid expansion through market expansion, acquisition and integration, etc., the contracted area of third-party projects of Ya Life (including controlling member companies) reached 558.5 million square meters, including a new contract area of over 43.2 million square meters, an increase from December 31, 2021 8.4%, accounting for 79.1% of the total contracted area, which is the main source of the growth of Ya Life's scale.
In terms of environmental protection business, as of June 30, 2022, the environmental protection business has successfully obtained a number of "Hazardous Waste Business Licenses", and the newly approved treatment qualifications cover multiple formats such as incineration, physicochemical treatment, flexible landfill and rigid landfill. The transformation of production capacity is accelerated and effective production capacity is released.
At the same time, the construction progress of its industrial parks has accelerated. At present, the overall progress of the construction of the Sanjiangkou Energy Saving and Environmental Protection Ecological Industrial Park has exceeded 50%, and it has fully entered the stage of equipment installation.
The development process of the new track is healthy, laying a solid foundation for future returns
In addition to diversified businesses such as property management, Agile is actively exploring "new tracks" with growth potential.
According to the interim report, Agile has laid out a new track in the new energy vehicle and condiment industries, and has become a shareholder of WM Motor Holdings Limited (WM Motor) and Guangdong Zhujiang Bridge Biotechnology Co., Ltd. respectively.
It is reported that with its diversified business layout in real estate development and property management, Agile will form a synergy with WM Motor and Pearl River Bridge in terms of sales and brand promotion.
According to the data, WM Motor is one of the pioneers in introducing electric vehicle technology to the mainstream market in China and has completed the submission of a listing application to The Stock Exchange of Hong Kong Limited (HKEx) in June 2022.
Currently, Agile holds a 6.46% stake in Weimar.
Once WM Motor is successfully listed, it will bring considerable investment returns to Agile, and it will also promote the development of cooperation between the two parties in terms of brand, sales and service network, charging facility development, auto finance, supply chain finance, and after-sales service.
The release of management dividends is accelerated, and the strategic route is clearer
In the first half of 2022, Agile will achieve scientific management and control, reduce costs and improve efficiency, increase revenue and reduce expenditures, and effectively empower the company's business development by asking for dividends from management.
As of June 30, 2022, Agile's sales and marketing costs and administrative expenses decreased by 450 million yuan, a year-on-year decrease of 14.2%;
In order to comply with the development trend of the industry, in the first half of 2022, Agile will actively revise and adjust its own development, with a more focused development strategy and a clearer short-, medium- and long-term development roadmap.
The core strategy of Agile is to focus on stability in the short term, excellence in the medium term, and focus in the long term.
In the short term, Agile focuses on stable operation and orderly progress in delivery.
The report shows that with the steady progress of de-leveraging, debt repayment on schedule, and orderly progress of guarantee delivery, Agile's operating fundamentals have further improved.
As for the medium and long-term arrangement, Agile said that with the steady progress of operation optimization and organizational reform, Agile's management structure is now flatter, and its operating efficiency has also been greatly improved.
In addition, with the gradual reduction of debt and the continuous improvement of operating performance, Agile will strive to become a developer with high quality and excellent service by focusing on high-energy city clusters and the main real estate business.