18 April 2006, Hong Kong. Shenzhen Investment (0604.HK), a Chinese property developer and infrastructure operator listed on the main board of the Hong Kong Stock Exchange, announced a 117% increase in its 2005 operating cash flows over the previous year. The operating cash flows amounted to HK$1,593m (ie. HK$0.64 per share). Its free cash flows reached HK$1,140m (compared to a negative figure in 2004).
In 2005, Shenzhen Investment¡¯s dividend payout ratio was lifted to 60% from 30-40% in previous years, reflecting its strong cash flows and determination to lift returns on equity. In the future, the company will aim for a growing payout ratio in order to share the company¡¯s continued success with all investors.
In 2005, the company¡¯s sales grew 50% (yoy) and blended gross margin rose 4 percentage points to reach 38.6%. EPS grew 26.4% (yoy) and net asset value went up by 29% as of end-2005 (yoy). Its return on equity also improved to 12.6% in 2005 from 11.9% in 2004.
Chairman Hu Aimin was very pleased with the achievement in 2005. ¡°In 2005, we focused on profitability and motivating our employees. We expanded our talent pool and improved the sustainability of our growth. 2005 marked the second year of 20%+ net profit growth¡±.
At present, the company has a total landbank of 3.58m square meters (GFA) - excluding construction in progress ¨C enough for construction in the next 5-7 years. During 2005, the company acquired two pieces of land totalling 587,000 square meters (GFA).
In 2005, the company sold 320,000 square meters of housing units, up 78% (yoy). Revenue from property sales amounted to HK$1.8bn, up 102%. Thanks to rising property prices, the company¡¯s gross profit margins in the property development business improved.
The size of the company¡¯s rental property increased to 900,000 square meters as of end-2005, and rental incomes grew 7% to HK$300m in 2005.
Road King, currently 24.72%-owned by Shenzhen Investment, has reported excellent 2005 results, and net profit attributable to Shenzhen Investment grew 15% (yoy). Its dividend payout also rose to 60% from less than 50% in previous years. Shenzhen Investment¡¯s 34%-owned Mawan Power plant recorded a 6.1% decline in earnings due to rising fuel costs.
In the next two years, Shenzhen Investment will focus on two strategies. First, it will strive to consolidate its existing businesses by disposing of non-core assets. Second, it will aim to improve returns on equity by introducing better incentives structure. Dividend payout will continue to rise.
The table below shows a summary of the company¡¯s 2005 financial results in comparison with 2004.
For inquiries, please contact:
Joe Zhang,
Chief Operating Officer,
Shenzhen Investment Limited
852-27240005
joe.zhang@shumyip.com.hk |
