China Vanke Co., Ltd.
2009 Third Quarterly Report
§1 Important Notice
1.1 The Board, the Supervisory Committee, Directors, members of the Supervisory Committee and senior management of the Company warrant that in respect of the information contained in this Quarterly Report, there are no misrepresentations or misleading statements, or material omission, and individually and collectively accept full responsibility for the authenticity, accuracy and completeness of the information contained in this Quarterly Report.
1.2 None of the Director, member of the Supervisory Committee and senior management fails to assure or disputes with the authenticity, accuracy and completeness of the contents of 2009 Third Quarterly Report.
1.3 Deputy Chairman Song Lin, Director Wang Yin and Director Jiang Wei were not able to attend the board meeting in person due to their business engagements and had authorised Director Yu Liang to represent them and vote on behalf of them. Independent Director Judy Tsui Lam Sin Lai was not able to attend the board meeting in person due to her business engagements and had authorised Independent Director David Li Ka Fai to represent her and vote on behalf of her. Independent Director Charles Li was not able to attend the board meeting in person due to business engagements and had authorised Independent Director Qi Daqing to represent him and vote on his behalf at the board meeting.
1.4 This quarterly financial and accounting reports of the Company have not been audited.
1.5 The Company’s Chairman Wang Shi, Director and President Yu Liang, and Executive Vice President and Supervisor of Finance Wang Wenjin declare that the financial report contained in this Quarterly Report is warranted to be true and complete. 1§2 Basic Corporate Information
2.1 Major accounting data and financial indicators
(Unit: RMB)
As at 30 September 2009
As at 31 December 2008
Changes
Total assets
131,514,124,967
120,586,410,234
9.06%
Shareholders’ equity（excluding minority interests）
34,942,753,924
31,891,925,262
9.57%
Total Shares
10,995,210,218
10,995,210,218
-
Net assets per share
3.18
2.90
9.66%
From July to September 2009
Changes
From January to
September 2009
Changes
Revenue
7,435,491,349
49.78%
27,988,969,280
31.96%
Profit attributable to equity shareholders of the Company
433,199,832
101.03%
2,957,592,239
29.92%
Net cash inflow from operating activities
-
-
11,241,209,260
665.13%
Net cash inflow from operating activities per share
-
-
1.022
664.64%
Basic earnings per share
0.039
95.00%
0.269
29.95%
Diluted earnings per share
0.039
95.00%
0.269
29.95%
Return on equity
1.24%
Increase 0.52percentage point
8.46%
Increase 0.89percentage point
2.2 Total number of shareholders and shareholding of the top 10 shareholders of non-restricted tradable shares as at the end of the Reporting Period
As at the end of 30 September 2009, the total number of shareholders of the Company was 1,324,772 (including 1,286,892 holders of A shares and 37,880 holders of B shares).
(Unit: share)
Total number of shareholders as at the end of the Reporting Period
1,324,772
Shareholdings of the top 10 shareholders of non-restricted tradable shares
Name of shareholders (in full)
Total number of non-restricted tradable shares held as at the end of the Reporting Period
Type
China Resources Co., Limited
1,355,094,766
A Share
China Life Insurance Company Limited– Dividend Distribution–Individual Dividend- 005L-FH002 Shen
193,530,833
A Share
Liu Yuansheng
133,791,208
A Share
ICBC–Rongtong Shenzhen Stock Exchange 100 Index Securities Investment Fund
102,137,903
A Share
Toyo Securities Asia Limited-A/C Client
90,038,032
B Share
HTHK/CMG FSGUFP-CMG First State China Growth Fund
82,406,712
B Share 2ICBC – Bosera Tertiary Industry Growth Stock Investment Fund
80,000,000
A Share
Bank of Communications–Bosera Emerging Growth Fund
75,000,000
A Share
ICBC - E Fund Value Growth Mixed Securities Investment Fund
72,085,189
A Share
Naito Securities Co., Ltd.
69,469,524
B Share
As at the end of 30 September 2009, the total number of shares of the Company was 10,995,210,218 including 9,680,254,750 A shares and 1,314,955,468 B shares.
2.3 Bond holdings of the Company’s top 10 bondholders as at the end of Reporting Period
(1) Name of the top 10 bondholders of 08 Vanke G1 bonds and their bondholdings
Serial No.
Bondholder
No. of bonds held
1
New China Life Insurance Company–Dividend Distribution–Individual Dividend-018L-FH002 Shen
5,548,262
2
China Petroleum Finance Co., Ltd.
4,157,662
3
China Pacific Life Insurance Company Limited
3,433,312
4
China Life Insurance Company Ltd.
2,519,008
5
China Ping An Life Insurance Company Limited–Traditional–General Insurance Products
2,218,727
6
China Life Property and Casualty Insurance Company Limited–Traditional– General Insurance Products
1,820,000
7
China Ping An Property and Casualty Insurance Company Limited–Investment Insurance Products
1,034,630
8
China Life Pension Company Limited–Internal Resources
1,000,000
9
China Reinsurance (Group) Corporation
776,162
10
Generali China Life Insurance–Investment Related Products–Stock Account
713,500
(2) Name of the top 10 bondholders of 08 Vanke G2 bonds and their bondholdings
Serial No.
Bondholder
No. of bonds held
1
ICBC/Credit Suisse Tianli Bond Securities Investment Fund
2,346,450
2
CITIC Securities Ltd
2,105,709
3
China National Machinery Imp. & Exp. Corporation
1,946,689
4
ICBC–BOCOM Schroders Principal-Protected Mixed Securities Investment Fund
1,388,331
5
206 Portfolio of National Social Security Fund, PRC
1,375,065
6
CCB–Fullgoal Tianfeng Surging Income Bond Securities Investment Fund
1,370,000
7
CITIC Securities Ltd–CITIC–CITIC Securities Bond Selected Asset Management Scheme
1,030,060
8
801 Portfolio of National Social Security Fund, PRC
859,778
9
Harvest Stable Growth Open-end Securities Investment Fund
709,798
10
202 Portfolio of National Social Security Fund, PRC
700,000
3§3 Management Discussion and Analysis
During the Reporting Period, the transaction volume of commodity housing in the county rose significantly from that of the corresponding period of last year. The sales area and sales amount increased by 69.9% and 118.5% from those of the same period last year, respectively. The sales area and sales amount of the 14 major cities on which China Vanke focused surged by 128.9% and 172.7% during the third quarter of 2009, respectively, as compared with the same period last year.
When compared with that of the second quarter, the sales area and sales amount of commodity housing in the country during the third quarter rose by 4.7% and 6.0%, respectively. However, market situation varied across regions, with correction seen in certain cities after sales hit record high in the middle the year.
Slowdown in the growth of transaction volume across the country and declining sales volume in certain cities in the third quarter as compared with the second quarter have something to do with supply shortage. When the market went through the adjustment period in 2008, enterprises lowered their construction work volume, but when the market started to recover this year, saleable inventory at the time was quickly absorbed. This led to a situation where in the short run, new supply would not be able to meet sales demand. By the third quarter, inventory available for sale on the market fell to a record low in recent years, restraining transaction volume from growing further.
What deserves attention is that the approved pre-sales area in a number of cities in September rose over that of July and August, indicating that the tight supply of new housing is gradually easing. This also is in line with the Company’s judgement made in its interim report regarding a relatively big growth in new housing supply by the end of the year. Increasing supply of new housing will help stabilise the housing price in the fourth quarter and realise a satisfactory transaction volume.
During the Reporting Period, the government’s adjustment to the second home mortgage policy, to certain extent, had “psychological” impact on the market. However, given that the government took action at a time when there was insufficient supply in the market and housing prices were under upward pressure, it was viewed as a just in time adjustment, with positive impact on preventing the market from overheating, while facilitating its healthy and steady growth.
During the Reporting Period, the Company realised a sales area of 1,615,000 sq m, with a sales revenue of RMB15.4 billion, representing increases of 18.2 per cent and 34.1 per cent, respectively, from those in the same period of 2008. From January to September 2009, the Company’s accumulated sales area and sales revenue amounted to 5,103,000 sq m and RMB46.2 billion, respectively, representing increases of 26.8 per cent and 29.6 per cent, respectively, from those in the same period of 2008.
During the first three quarters, the Company realised a sales area of 1,367,000 sq m and a sales revenue of RMB13.9 billion in the Pearl River Delta region, representing increases of 12.4 per cent and 18.3 per cent, respectively, from those of the same period previous year. In the Yangtze River Delta region, the Company realised a sales area of 1,452,000 sq m and a sales revenue of RMB15.1 billion, representing increases of 10.6 per cent and 12.1 per cent, respectively, from those of the same period 4previous year. The Company realised a sales area of 1,593,000 sq m and a sales revenue of RMB12.4 billion in the Bohai-Rim region, representing increases of 64.2 per cent and 73.6 per cent, respectively, from those of the same period previous year. In other markets, the Company achieved a sales area of 690,000 sq m and a sales revenue of RMB4.7 billion, representing increases of 31.7 per cent and 46.3 per cent, respectively, from those of the same period previous year.
During the Reporting Period, the Company’s booked area and booked revenue reached 1,028,000 sq m and RMB7.2 billion, respectively, representing increases of 70.2 per cent and 47.9 per cent, respectively, from those of the same period last year. The Company’s revenue and net profit during the Reporting Period amounted to RM7.4 billion and RMB433.2 million, respectively, representing increases of 49.8 per cent and 101.0 per cent, respectively, from those of the same period last year. From January to September, the Company’s booked area and book revenue were 3,513,000 sq m and RMB27.6 billion, respectively, representing increases of 30.9 per cent and 32.0 per cent, respectively, from those of the same period last year. During the first nine months of 2009, the Company’s accumulated revenue and net profit amounted to RMB28.0 billion and RMB2.96 billion, respectively, representing increases of 32.0 per cent and 29.9 per cent, respectively, from those of the same period previous year. As at the end of the Reporting Period, the Company had an area of 4,502,000 sq m sold but not yet completed and booked. The area involved a total contract amount of RMB39.37 billion.
As at the end of the Reporting Period, the Company’s cash and cash equivalents amounted to RMB27.6 billion, and short-term borrowings and long-term borrowings due within one year totalled RMB8.3 billion. With a net debt ratio of 9.8 per cent, the Company’s financial position remained sound.
During the Reporting Period, the Company continued to comply with the high standards it set for obtaining new projects. During the period, the Company obtained 15 projects in 11 cities, namely Guangzhou, Foshan, Zhongshan, Changsha, Hangzhou, Ningbo, Nanchang, Beijing, Tianjin. Qingdao, Wuhan. The aggregate plot ratio GFA was approximately 4,111,000 sq m, of which 2,844,000 sq m of total GFA is attributable to China Vanke’s equity holding. China Vanke’s current land bank is insufficient to meet the needs for development in the next three years. In view of the need for continuous growth, the Company will keep an eye on the market situation and capture every opportunity for replenishing its land bank with quality sites for future development.
During the Reporting Period, the Company maintained its development focus on “quality and efficiency”. It improved its operation and profitability through a series of measures including fine-tuning its products, strengthening cost and expenses management and maximising its advantage in economies of scale and broad market coverage.
During the period, the Company actively promoted standardisation of furbished units within the Group. Working towards this goal, the Company combined the Group’s resources and increased the use of central purchasing to make purchases. The Company has now set the standards for C-grade furbished units, and promotion of these standards across the Group is underway. In August, the Company bought materials for C-grade furbished units through central procurement in Shanghai. The purchase amount exceeded RMB1 billion, representing a cost reduction of over RMB100 million. The Company will continue to promote product standardisation, to increase the use of central purchasing in order to
5benefit from bulk purchase.
During the quarter under review, the Company further tightened its cost and expenses control, through simplifying management process, adopting stringent supervision measures, intensifying customer research, and fine-tuning its advertising strategy. For the first three quarters of 2009, the Company’s administrative expenses and distribution costs decreased by 11.1 per cent and 17.6 per cent, respectively, from those of the same period last year. The aggregate amount of administrative expenses and distribution costs as a percentage of revenue decreased by 35.2 per cent from that of the same period last year.
The Company mentioned at the beginning of the year that it would further expand its source of funding and would consider equity financing at an appropriate time. Since then, the Company has increased the pace of project development and seized market opportunities to replenish its land bank. All these drive up the Company’s capital needs. During the Reporting Period, the proposal regarding the public offer of new A shares was approved by the board of directors of the Company. The related financing plan was also passed by a majority vote at the Company’s 2009 first special general meeting on 15 September 2009. The issue of shares is expected to further enhance the Company’s financial position and operation flexibility, which will be beneficial to the Company’s sustainable development.
On 29 September, the Company’s office address changed from Vanke Architecture Research Centre, No. 63 Meilin Road, Futian District, Shenzhen to Vanke Center, No. 33 Huanmei Road, Dameisha, Yantian District, Shenzhen.
New projects
During the Reporting Period, the Company had 15 new projects, with a total planned gross floor area (“GFA”) of approximately 4,111,000 sq m, of which approximately 2,844,000 sq m of total planned GFA is attributable to China Vanke’s equity holding. From January to September, the Company had 30 new projects, with a total planned GFA of approximately 8,308,000 sq m, of which approximately 6,327,000 sq m of total planned GFA is attributable to China Vanke’s equity holding, and the average cost of land is RMB2,689 per sq m. As at the end of the Reporting Period, the GFA of the projects under planning attributable to China Vanke’s equity holding was 21,640,000 sq m. 6The details of the new projects during the third quarter are as follows:
(Unit: ’000 sq m)
City
Project name
Location
Percentage of shareholding
Site area (sq m)
Planned GFA
(sq m)
Planned GFA attributable to China Vanke’s equity holding (sq m)
Progress
Jinshazhou B04 land lot
Baiyun district
100%
17.2
31.0
31.0
Preliminary
Guangzhou
Nansha 08NJY-1 Project
Nansha district
95%
134.8
269.5
256.0
Preliminary
Foshan
Dengzhou land lot, Chencun, Shunde
Shunde district
49%
284.0
710.1
347.9
Preliminary
Zhongshan
Kuchong land lot
East district
100%
76.4
152.9
152.9
Preliminary
Four Seas Project
Yuelu district
80%
38.3
137.6
110.1
Preliminary
Changsha
Hongfa Project
Yuhua district
60%
232.4
545.0
327.0
Preliminary
Caozhuang R21-25 Project
Jianggan district
100%
14.2
33.9
33.9
Preliminary
Hangzhou
Caozhuang R21-24 Project
Jianggan district
100%
23.0
53.0
53.0
Preliminary
Ningbo
Cicheng Project
Jiangbei district
100%
314.2
393.7
393.7
Preliminary
Nanchang
Police Academy Project
Qingyunpu district
50%
97.1
145.2
72.6
Preliminary
Changyang No. 1 Project
Fangshan district
50%
160.9
341.5
170.7
Preliminary
Beijing
Changyang No. 5 Project
Fangshan district
50%
276.2
511.7
255.9
Preliminary
Tianjin
Airport Price-restricted Housing Project
Dongli district
51%
136.5
204.8
104.4
Preliminary
Qingdao
Houtaolin Project
Chengyang district
80%
130.9
231.6
185.3
Preliminary
Wuhan
Land parcel for final phase of City Garden Project
Donghu new technology development district
100%
231.0
349.6
349.6
Preliminary
Total
2,167.1
4,111.2
2,844.2
-
7From the end of the Reporting Period to the day of publication of this report, the Company obtained 2 new projects, with a total land premium of RMB1,220 million. The planned GFA of these 2 projects is 614,000 sq m, of which 362,000 sq m of GFA is attributable to China Vanke’s equity holding. The details are as follows:
(Units: ’000 sq m)
City
Project name
Location
Percentage of shareholding
Site area (sq m)
Planned GFA
(sq m)
Planned GFA attributable to China Vanke’s equity hodling (sq m)
Progress
Xiamen
Xiang’an X2009G04 Project
Xiang’an district
100%
54.4
109.0
109.0
Preliminary
Changchun
Diesel Plant Project
Er’dao district
50%
251.4
505.0
252.5
Preliminary
Total
305.8
614.0
361.5
-
§4 Significant Events
4.1 Significant changes and reasons for such changes in major items of the accounting statements and financial indicators of the Company
√Applicable □Not applicable
ITEMS
30/9/2009
(RMB'000)
31/12/2008
(RMB'000)
Change(+/-)
Reasons for change
Cash and cash equivalents
27,614,616
19,978,286
38.22%
Growth in sales and increase in cash reserves
Interest-bearing borrowings (Short term)
8,322,920
17,866,343
-53.42%
Loan repayment
Interest-bearing borrowings and bonds (Long term)
23,443,557
14,942,136
56.90%
Increase in long-term borrowings
ITEMS
2009.1-9
(RMB'000)
2008.1-9
(RMB'000)
Change(+/-)
Reasons for change
Revenue
27,988,969
21,210,466
31.96%
Significant increase of property sale in the current period
Cost of sales
20,414,159
13,987,387
45.95%
Property development scale expanding and increase in land cost
Distribution costs
934,484
1,133,777
-17.58%
Change in sales strategy and strengthened cost control
Share of profits less losses of associates
184,173
14,945
1132.34%
Increase in profits of invested entities and disposal of partial equity interest of the companies
Minority interest
712,390
357,779
99.11%
Increase in the share of profits by partners
84.2 Progress of significant events and analysis of their impact and solutions
√Applicable □Not applicable
In 27 August 2009, the Company announced the resolution regarding the public offer of A shares approved at a meeting of the board of directors. The resolution regarding the public offer of A share was approved at the First Special General Meeting held on 15 September 2009. For details, please refer to the announcements published in China Securities Journal, Securities Times, Shanghai Securities News, cninfo.com.cn and irasia.com in Hong Kong on 27 August and 16 September 2009. The work in relation to the public offer of A share is now proceeding on a normal course.
4.3 Implementation of the undertakings given by the Company, shareholders and beneficial controllers
√ Applicable □Not applicable
Undertaking
Details
Implementation
Share reform
Under the Company’s share reform, CRC had undertaken not to trade or transfer its non-tradable shares within the 12-month period from the date on which such non-tradable shares were granted the right to list on the stock exchange. After the expiry of the 12-month period, the original non-tradable shares could be sold through trading on the stock exchange. The amount of shares to be sold shall not exceed 5 per cent and 10 per cent of the Company’s total issued shares during the respective periods of 12 months and 24 months. In addition, the selling price shall not be less than 120 per cent of the exercise price of the put warrant (the selling price will be adjusted during the statutory share disposal restriction period and according to the adjustment methods for the exercise price of the put warrant).
Undertakings have been strictly fulfilled
Undertakings given in acquisition report or report on change in equity interests
No
Undertakings given in major asset restructuring
No
Undertakings given at the time of the issue
For the private placing of A shares in 2006, CRC undertook to be subject to a lock-up period of 36 months for the subscribed shares of its own accord. CRC holds 264,000,000 restricted tradable shares of the Company issued from the 2006 private placing, and that amount represents 2.4% of the Company’s total number of shares. The lock-up period of these shares will expire on26 December 2009.
Undertakings have been strictly fulfilled
Other undertakings given to non major shareholders
China Resources National Corporation (“CRNC”) – the parent company of CRC, being the Company’s original single largest shareholder and the present single largest shareholder, gave a significant undertaking to the Company in 2001: CRNC would provide as much support to the Company as it did in the past, as long as such support was beneficial to the Company’s development, and that it would remain impartial in the event of any competition between the investment projects of the Company and that of CRNC and its subsidiaries, and in the event of any disagreements or disputes arising from horizontal competition.
CRNC has fulfilled its undertakings.
4.4 Warning of and explanation for the accumulated net profit from the beginning of the year to the end of the next reporting period forecast to be a probable loss or to be significantly differed from that of the corresponding period of the previous year
□Applicable √Not applicable
4.5 Other major events and their explanations
4.5.1 Securities investments
9□Applicable √Not applicable
4.5.2 Equity interests held in other listed companies
√Applicable □Not applicable
(Unit: RMB)
Stock code
Stock abbreviation
Initial investment amount
Percentage of shareholdings
Booked value as at the end of the Reporting Period
Gains/(losses) from January to September in 2009
Changes in equity attributable to equity shareholders from January to September in 2009
000001
Shenzhen Development Bank Co., Ltd – A
11,582,347.80
0.10%
60,308,539.20
-
31,796,856.00
600697
Changchun Eurasia Group Co., Ltd
5,070,000.00
1.18%
35,342,974.26
563,683.80
8,192,204.56
600680
Shanghai Potevio Co., Ltd
7,076,961.71
0.90%
29,561,918.06
6,933,221.12
7,073,278.60
600751
S*ST Tianjin Marine Shipping Co., Ltd.
143,600.00
0.04%
143,600.00
-
-
Total
23,872,909.51
-
125,357,031.52
7,496,904.92
47,062,339.16
4.5.3 Investor relations activities such as meetings, communications and handling of inquiries during the Reporting Period
Type of Activities
Time
Location
Approach
Classification of visitors
Issues discussed and information provided
Morgan Stanley meeting
2009.7
Hong Kong
Face to face meeting
Investors including securities companies, funds, etc
Deutsche Bank meeting
2009.7
Hong Kong
Face to face meeting
Investors including securities companies, funds, etc
Guosen Securities meeting
2009.7
Chongqing
Face to face meeting
Investors including securities companies, funds, etc
Nomura Securities meeting
2009.7
Singapore
Face to face meeting
Investors including securities companies, funds, etc
Macquarie meeting
2009.7
Hong Kong
Face to face meeting
Investors including securities companies, funds, etc
Sinolink Securities meeting
2009.7
Guilin
Face to face meeting
Investors including securities companies, funds, etc
Goldman Sachs meeting
2009.7
Hong Kong
Face to face meeting
Investors including securities companies, funds, etc
Interim results presentation
2009.8
Hong Kong, Shenzhen (Shanghai, Beijing)
Face to face meeting
Investors including securities companies, funds, individual investors, etc
United Securities meeting
2009.8
Beijing
Face to face meeting
Investors including securities companies, funds, etc
China Jianyin Investment Securities meeting
2009.8
Beijing
Face to face meeting
Investors including securities companies, funds, etc
(I) Major issues discussed:
(1) The Company’s daily operations;
(2) The Company’s development strategies;
(3) The Company’s opinion on the changes in the industry.
(II) Major information provided:
Published information including the Company’s regular reports.
10Changjiang Securities meeting
2009.8
Beijing
Face to face meeting
Investors including securities companies, funds, etc
Shenyin Wanguo meeting
2009.8
Hangzhou
Face to face meeting
Investors including securities companies, funds, etc
Guotai Junan meeting
2009.8
Shenzhen
Face to face meeting
Investors including securities companies, funds, etc
JP Morgan meeting
2009.9
Hong Kong
Face to face meeting
Investors including securities companies, funds, etc
Nomura Securities meeting
2009.9
Beijing
Face to face meeting
Investors including securities companies, funds, etc
Everbright Securities meeting
2009.9
Shanghai
Face to face meeting
Investors including securities companies, funds, etc
CICC meeting
2009.9
Shanghai
Face to face meeting
Investors including securities companies, funds, etc
CLSA meeting
2009.9
Shanghai
Face to face meeting
Investors including securities companies, funds, etc
Sinolink Securities meeting
2009.9
Shenzhen
Face to face meeting
Investors including securities companies, funds, etc
UBS meeting
2009.9
Hong Kong
Face to face meeting
Investors including securities companies, funds, etc
CLSA meeting
2009.9
Hong Kong
Face to face meeting
Investors including securities companies, funds, etc
Note: The above-mentioned meetings included one-on-one meetings, small group meetings and large group presentation. The Company received or met with investors from over 50 companies.
Securities companies
During the Reporting Period
Shenzhen, Dongguan, Guangzhou, Suzhou, Shanghai, Hangzhou, Nanjing, Wuxi, Tianjin, Shenyang, Beijing, Wuhan, Chengdu, Chongqing, Changsha, etc
Small group or one-on-one
Goldman Sachs, Shenyin Wanguo, CLSA, UBS, Macquarie, First Shanghai Securities, JP Morgan, Morgan Stanley, Everbright Securities, Citi, Goldman Sachs Gaohua, CITIC Securities, Deutsche Bank, Credit Suisse, Nomura Securities, Changjiang Securities, CICC, BOC International, Hongta Securities, Donghai Securities, Guodu Securities, China Merchants Securities, ABN Amro, Mitsubishi UFJ, Essence Securities, United Securities, Ping An Securities, Taishin Securities, HSBC, Yuanta Securities, Daiwa Securities, Southchina Securities, CSC International, Merrill Lynch, CCB International, Great Wall Securities, Guosen Securities, Royal Bank of Scotland, BNP, DBS Vickers, Research-works, etc
11Fund and other investment companies and individual investors
During the Reporting Period
Shenzhen, Dongguan, Guangzhou, Suzhou, Shanghai, Hangzhou, Nanjing, Wuxi, Tianjin, Shenyang, Beijing, Wuhan, Chengdu, Chongqing, Changsha, etc.
Small group or one-on-one
China Galaxy Investment Management Company Limited (中国银河投资管理有限公司), Dalian Chenxi Investment Company, China Life, E Fund, China AMC, Greenwoods Asset Management, Harvest Fund, Fortis Haitong Fund, Bosera Funds, Fullgoal Fund, China Southern Fund, China Universal, China Life Franklin Asset Management Co., Limited, Mirae Asset, Zhonghai Fund, Taikang Life, Cephei Investment, Bank of Communications Schroder Fund, Dacheng Fund, , Lion Fund, Invesco Great Wall Fund, Guangfa Fund, Hua An Fund, Rongtong Fund, Fuh Hwa Securities Investment Trust, sinowise, CCB Principal Asset Management, Yinhua Fund, Beijing Ding Tian Investment Management Company Limited, Franklin Templeton Sealand Fund, Waddell & Reed Investment Management Co., ICBC Credit Suisse Asset Management, Ignis Investment Services Limited, Emerging Markets Mgmt LLC, Fortress Investment Group, ING Real Estate, Cohen & Steers, Galleon Asia, JPMorgan Asset Management, Fidelity, Bain Capital, Portman Holdings, UBS AG, UBS Global Asset management, Rexiter, American Century Investment, CM Asia Pacific, Hamon Asset Management Limited, Blackstone Group Asia Limited, Fox-Pitt, Sansar, Oppenheimer Fund, Acru Asset Management, HT Capital, MFC Global Investment Management, Broad Peak Investment, Sloane Robinson, Alliance Bernstein, Lansdowne, Templeton, Marshall Wace, T Rowe Price, Robeco, Kingdon Capital, TPG－Axon, Tiger Asia, Montpelier Asset Management, Joho Partner, Newton Investment Management, BEA Union Investment, JF Asset Management, Farallon, Hellman& Friedman, Capital, PMA, Capital, PMA, Soros Capital Management, Partner Fund, Keywise Capital, Blue Ridge, Norges Bank, APG Investments, Janus Capital, MICH Investments, Highbridge, Sumitomo Trust & Banking, TY Advisor, Piper Jaffray & Co., Triskele Capital Management Limited, Marverick Capital, Bennelong, Dragon Back, Union Investment privatfords GMBH, AMP Capital, Henderson Global Marvin & Palmer, Harding Loevner LLC, UOB Kay Hian, GLG Partners LP, DIAM Asset Management, Nomura Securities, TIAA CREF, GMO, Owl Creek Asset Management, Buena Vista Fund, Dodge and Cox US, Tiedemann, Aberdeen, Tiburon Partners, Clairvoyance, Mirae Asset Inv Mgmt, SAC Capital, ABC-CA Fund Mgmt, Daiwa Asset Management, Fair Asset Management, NPJ AM, Boyer Allan Investment Management, GE Asset Management, Jupiter Asset Management Ltd, Kelusa Capital, Alpine Woods Capital, GIC, Kylin Fund, orange capital partners, Wellington, Black Rock, Allegiant Asset Management Company, TIAA-CREF, Lazard Asset Management, Putnam Investments, William Blair, Kingdom, T-Rowe Price, emperor investments, etc
124.5.4 Other major events and their explanations
√ Applicable □Not applicable
(1) The Company did not provide any funds for use by its controlling shareholder and its related parties, nor did the Company provide any guarantee to third parties in violation of regulations and procedures;
(2) During the Reporting Period, the Company distributed the first-year interest of the Company’s “08 Vanke G1” and “08 Vanke G2” corporate bonds. During the reporting period, the Company’s issued bonds had been tracked and rated by China Chengxin Securities Rating Co., Ltd. (中诚信证券评估有限公司). The rating company gave an AAA credit rating for “08 Vanke G1”, and AA+ credit rating for “08 Vanke G2”, and AA+ credit rating for the Company as a whole. The Company had maintained a sound credit standing.
4.6 Investment in derivatives
√ Applicable □Not applicable
Remarks on risk analysis and management of derivative positions during the Reporting Period (including but not limited to market risk, liquidity risk, credit risk, operational risk and legal risk, etc.)
In order to hedge against exchange rate risk of foreign currency loan, the Company entered into a non-deliverable forward (NDF) contract to hedge a US$19.8 million loan. NDF is used to hedge against the risk arises from the change in exchange rate by fixing a forward exchange rate on the notional amount during the term of the contract. During the Reporting Period, the NDF reached maturity and was settled. As at the end of the Reporting Period, the Company did not have any derivative investments.
Change in market price or fair value of the derivatives during the Reporting Period, as well as the method, related assumptions and parameters used to analyse the fair value of derivatives should be disclosed
The effect of the change in the fair value of the NDF on the Company’s profit or loss during the Reporting Period was RMB220,048.28. The fair value of the Company’s NDF is determined with reference to the market price of the NDF which matured on the same day.
Remarks on whether there is a material change in the accounting policy and principles for derivatives during the Reporting Period
No
Professional opinions from independent directors, sponsor or financial adviser on the Company’s investment and risk management of derivatives
The Company’s independent directors are of the view that the use of NDF reduced the loss of the Company associated with foreign currency loan in the event of significant fluctuations in exchange rate. The Company’s arrangement has been prudent and reasonable.
4.6.1 Derivative positions as at the end of the Reporting Period
□Applicable √ Not applicable
13Consolidated income statement for the three months ended 30 September 2009
(Expressed in Renminbi Yuan)
Jul-Sep 2009
Jul-Sep 2008
Revenue
7,435,491,349
4,964,360,034
Cost of sales
(5,573,311,057)
(3,781,543,643)
Gross profit
1,862,180,292
1,182,816,391
Other income
162,727,234
8,324,747
Distribution costs
(383,036,687)
(424,593,690)
Administrative expenses
(327,000,586)
(187,671,880)
Other expenses
(38,568,672)
(21,594,040)
Results from operating activities
1,276,301,581
557,281,528
Financial income
48,789,145
27,298,817
Financial expenses
(239,522,024)
(98,673,515)
Net finance costs
(190,732,879)
(71,374,698)
Share of profits less losses of associates
20,806,265
13,179,290
Share of profits less losses of jointly controlled entities
13,749,178
39,703,775
Profit before taxation
1,120,124,145
538,789,895
Income tax
(550,369,440)
(211,139,604)
Profit for the period
569,754,705
327,650,291
Attributable to:
Profit attributable to equity shareholders of the Company
433,199,832
215,486,088
Minority interests
136,554,873
112,164,203
Profit for the period
569,754,705
327,650,291
Earnings per share
Basic
0.039
0.020
Diluted
0.039
0.020
Other comprehensive income for the period
(11,717,794)
(13,822,688)
Total comprehensive income for the period
558,036,911
313,827,603
Attributable to:
Equity shareholders of the Company
421,482,038
201,663,400
Minority interests
136,554,873
112,164,203 14Consolidated income statement for the nine months ended 30 September 2009
(Expressed in Renminbi Yuan)
Jan-Sep 2009
Jan-Sep 2008
Revenue
27,988,969,280
21,210,466,144
Cost of sales
(20,414,159,486)
(13,987,387,412)
Gross profit
7,574,809,794
7,223,078,732
Other income
216,288,710
50,010,030
Distribution costs
(934,484,166)
(1,133,777,027)
Administrative expenses
(908,874,865)
(1,022,230,614)
Other expenses
(106,972,915)
(74,869,367)
Results from operating activities
5,840,766,558
5,042,211,754
Financial income
183,521,350
192,386,012
Financial expenses
(586,361,344)
(446,716,451)
Net finance costs
(402,839,994)
(254,330,439)
Share of profits less losses of associates
184,172,621
14,944,922
Share of profits less losses of jointly controlled entities
(4,580,863)
59,719,179
Profit before taxation
5,617,518,322
4,862,545,416
Income tax
(1,947,536,362)
(2,228,225,055)
Profit for the period
3,669,981,960
2,634,320,361
Attributable to:
Profit attributable to equity shareholders of the Company
2,957,592,239
2,276,541,800
Minority interests
712,389,721
357,778,561
Profit for the period
3,669,981,960
2,634,320,361
Earnings per share
Basic
0.269
0.207
Diluted
0.269
0.207
Other comprehensive income for the period
36,823,021
52,194,759
Total comprehensive income for the period
3,706,804,981
2,686,515,120
Attributable to:
Equity shareholders of the Company
2,994,415,259
2,328,736,559
Minority interests
712,389,722
357,778,561
15Consolidated balance sheet as at 30 September 2009
(Expressed in Renminbi Yuan)
30 Sep 2009
31 Dec 2008
Non-current assets
Property, plant and equipment
1,172,573,933
1,290,600,931
Investment properties
229,597,579
198,394,767
Construction in progress
105,297,971
188,587,023
Interest in associates
500,476,813
508,175,188
Interest in jointly controlled entities
1,893,228,296
1,888,809,160
Other financial assets
221,798,490
256,158,816
Intangible assets
82,378,908
-
Deferred tax assets
1,504,389,233
1,449,480,633
Total non-current assets
5,709,741,223
5,780,206,518
Current assets
Inventories
53,835,069
48,111,356
Properties held for development
37,958,216,339
34,131,859,032
Properties under development
42,442,850,958
44,340,453,697
Completed properties for sale
6,755,332,903
7,890,962,140
Trade and other receivables
10,979,532,380
8,416,531,561
Cash and cash equivalents
27,614,616,095
19,978,285,930
Total current assets
125,804,383,744
114,806,203,716
TOTAL ASSETS
131,514,124,967
120,586,410,234
CAPITAL AND RESERVES
Share capital
10,995,210,218
10,995,210,218
Reserves
24,433,679,122
22,146,755,978
Awarded Shares purchased for the
Employees’ Share Award Scheme
(486,135,416)
(1,250,040,934)
Total equity attributable to equity
shareholders of the Company
34,942,753,924
31,891,925,262
Minority interests
7,421,395,795
6,926,624,219
TOTAL EQUITY
42,364,149,719
38,818,549,481
16Consolidated balance sheet as at 30 September 2009 （continued）
(Expressed in Renminbi Yuan)
30 Sep 2009
31 Dec 2008
Non-current liabilities
Interest-bearing borrowings and bonds(Long term)
23,443,556,632
14,942,136,092
Deferred tax liabilities
1,243,366,150
1,380,487,627
Other long term liabilities
11,786,604
12,644,850
Provisions
32,429,428
41,729,468
Total non-current liabilities
24,731,138,814
16,376,998,037
Current liabilities
Interest-bearing borrowings(Short term)
8,322,919,884
17,866,342,910
Financial derivatives
-
1,694,880
Trade and other payables
52,949,538,249
43,979,207,733
Current taxation
3,146,378,301
3,543,617,193
Total current liabilities
64,418,836,434
65,390,862,716
TOTAL LIABILITIES
89,149,975,248
81,767,860,753
TOTAL EQUITY AND LIABILITIES
131,514,124,967
120,586,410,234
)
)
) Directors
)
）
17Consolidated cash flow statement for the nine months ended 30 September 2009
(Expressed in Renminbi Yuan)
Jan-Sep 2009
Jan-Sep2008
Cash received from sales of products
41,355,694,164
31,991,624,081
Other cash received from business operating activities
1,799,176,130
1,655,910,985
Cash generated from operating activities
43,154,870,294
33,647,535,066
Cash paid for purchasing of merchandise and services
21,466,720,733
23,163,910,324
Cash paid to employees or paid for employees
868,308,952
1,931,518,754
Tax paid for tax
5,391,007,399
6,393,483,242
Other cash paid for business operating activities
4,187,623,950
4,147,762,796
Cash used in operating activities
31,913,661,034
35,636,675,116
Net cash used in operating activities
11,241,209,260
(1,989,140,050)
Proceeds from disposal of interest in other long term investments
90,477,205
844,049,750
Proceeds from investment income
228,763,122
34,120,115
Proceeds from disposal fixed assets
88,802,961
4,056,312
Acquisitions of interest in associates, jointly controlled entities and other investments
4,400,259
-
Other cash received relating to investing activities
172,237,517
169,542,207
Cash generated from investing activities
584,681,064
1,051,768,384
Acquisition of fixed assets
84,475,241
184,358,958
Cash paid for acquisition of investments
202,806,289
251,294,540
Cash paid for acquisition of subsidiaries
569,017,159
2,746,538,193
Cash used in investing activities
856,298,689
3,182,191,691
Net cash used in investing activities
(271,617,625)
(2,130,423,307)
Capital injection from minority interests of subsidiaries
157,235,000
472,257,408
Proceeds from loans and borrowings
17,866,920,394
12,814,500,108
Received from other financing activities
-
5,855,297,211
Cash generated from financing activities
18,024,155,394
19,142,054,727
Repayment of loans and borrowings
18,822,758,840
9,697,651,296
Dividend paid to equity shareholders of the Company and Interest paid
2,534,774,284
2,383,042,422
Cash used in financing activities
21,357,533,124
12,080,693,718
Net cash generated from financing activities
(3,333,377,730)
7,061,361,009
Effect of foreign exchange rates
116,260
(45,884,416)
Net increase/(decrease) in cash and cash equivalents
7,636,330,165
2,895,913,236
Cash and cash equivalents at 1 January
19,978,285,930
17,046,504,584
Cash and cash equivalents at 30 September
27,614,616,095
19,942,417,820
18
