Continued debt reduction -- the net debt ratio for the year of June 30, 2015 was 79%, down 5.5 percentage points from 84.5% at the end of last year. Analysts at the earnings conference were generally more concerned about the company's further debt reduction plans. The company said that since it will operate on a light asset model in the future, profits from heavy asset business contributions will each account for half after 3 years, so it is expected that the net debt ratio will drop by 10-15 percentage points each year. The company expects to record a net cash inflow of around 45-550 million yuan before financing this year (same below). Furthermore, the company plans to issue domestic corporate bonds within the year to redeem perpetual capital instruments and repay short-term debts.
Non-real estate businesses will be spun off one after another — in addition to the real estate business, the company also has 7 other businesses, including property management (color life), finance, commercial community services (Meiyijia), commercial management, cultural tourism (Grand Cultural Tourism), community care for the elderly (Fortainian), and education services. In addition to CaiLife, which is already listed, the company clearly stated that it will continue to spin-off its non-real estate business and go public. This is in line with our earlier expectations.
Light capitalization of land reserves - The company said it will still look for land purchase opportunities in first-tier cities (especially Shenzhen), except that it will buy land in second- and third-tier cities, but it will cooperate with other developers to develop new projects through various new year project start-up capital and other developers to implement light capitalization.
The controlling shareholder's holdings have only increased and not decreased — Chairman Pan Jun said that it has been six years since the company went public, and during that time, he and his partners have only continued to increase their holdings of the company's shares, and have never decreased their holdings too much. Their stocks will only increase or decrease in the future, because they are confident in the company's development prospects.
Mid-term core net profit rose slightly by 2% — Net profit for the first half of the year increased 105% year-on-year to 208 million yuan, while core profit after excluding changes in the fair value of investment properties rose slightly by 2% to 76.3 million yuan.