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Sunac China's net profit exceeds RMB 10 billion, and cultural tourism revenue only accounts for 1.3%

Date: 2020-08-26

Sunac achieved operating income of RMB 77.34 billion in the first half of the year.

On August 26, Sunac China released a performance report for the first half of 2020. According to data, in the first half of 2020, Sunac achieved operating income of RMB 77.34 billion, an increase of 0.7% year-on-year; net profit of RMB 10.96 billion, an increase of 6.5% year-on-year, was the only one of the three domestic real estate companies to maintain positive net profit. Growing business.

After the release of the performance report, Sunac China's stock price rose rapidly and then plunged to green for a time, with an amplitude of nearly 4%.

China Science and Technology News noted that Sunac China’s net debt ratio is still high compared to the other two of the Three Musketeers. As of June 30, 2020, Sunac China's net debt ratio is 149%. At the end of 2019, the company's net debt ratio exceeded 170%.

In fact, the net debt ratio of 149% has declared that Sunac China’s reduction of its debt sheet attitude "aborted" three years ago.

Previously, on September 1, 2017, Sunac China held its annual interim results meeting in Hong Kong. At that time, Sunac China was being questioned by the market due to its debt expansion and the acquisition of more than 40 billion Wanda Cultural Tourism assets. At the meeting, Wang Mengde, President of Sunac China, said that by 2018, Sunac China's debt ratio target will be reduced to 80%, and in 2019, it is hoped that the debt-to-asset ratio and net debt ratio will be reduced to 70%.

China Science and Technology News Network noticed that Sunac China’s financial costs increased rapidly in the first half of the year while the net debt ratio was smashed. The interim results report shows that from January to June 2020, the company's financial costs were 2.452 billion yuan, a 98.86% increase compared to 1.233 billion yuan in the same period in 2019.

After deducting capitalized interest expenses, Sunac China's net financial costs were 1.59 billion yuan, an increase of 160% compared to 613 million yuan in the same period in 2019.

In addition, the interim report showed that in Sunac China's revenue, real estate sales accounted for the largest proportion. In the first half of the year, Sunac property sales revenue reached 73.07 billion yuan, accounting for 94.5%; while the construction and operation of cultural tourism city, including the acquisition of Wanda Cultural Tourism assets, had revenue of only 980 million yuan, accounting for only 1.3% of the total.

It is worth mentioning that out of Sunac China’s 10.9 billion net profit, other income and income contributed a lot. Data show that in the first half of 2020, Sunac China's other income was 7.31 billion yuan, an increase of 2.12 billion yuan compared to the same period in 2019. Unlike the same period in 2019, Sunac China’s income this year mainly came from the sale of shares in Jinke.

In April 2020, Jinke shares announced that Tianjin Jujin Property Management Co., Ltd., one of the company’s shareholders, intends to transfer 11% of the company’s shares to Guangdong Hongmin Enterprise Management Consulting Co., Ltd., involving a total of 587 million Jinke shares. Calculating the transaction price of 8 yuan per share, the total price is 4.699 billion yuan.

Public information shows that Tianjin Jujin Property Management Co., Ltd. is a subsidiary of Tianjin Sunac.

It is reported that from Sunac’s first shareholding in Jinke in September 2016 to when it reduced its shareholding, Jinke’s share price has risen from 4.39 yuan to over 8 yuan, and the market value of its shares is nearly 12.5 billion yuan. In the case of dividends, Sunac's investment in Jinke Fuying may exceed 5 billion. This value accounted for 45.6% of Sunac’s 10.96 billion net profit in the first half of the year.