Everbright Grand China Assets Limited (“Everbright Grand China” or the “Group”; HKEX stock code: 03699), a subsidiary of China Everbright Group, principally engaged in the businesses of property leasing, property management and the sales of properties held for sale, announced its interim results for the six months ended 30 June 2023 (“Reporting Period”).
During the reporting period, the Group recorded a revenue of approx. RMB22.1 million, represented a decrease of approx. RMB5.0 million compared with the corresponding period of last year (2022: RMB27.1 million), mainly due to the drop in the occupancy rate. Profit attributable to equity shareholders of the Company amounted to approx. RMB13.3 million (2022: RMB12.3 million), representing an increase of approximately RMB1.0 million as compared to the same period last year, mainly attributable to the rise in the valuation gains on investment properties. The basic earnings per share was approximately RMB0.03. (2022: RMB 0.03).
Property Leasing
As at 30 June 2023, the Group’s property portfolio includes Everbright Financial Center, part of Everbright International Mansion and Ming Chang Building, which are located in Chengdu, Sichuan Province and Kunming, Yunnan Province, respectively, with a total gross floor area of approximately 89,507 (31 December 2022: 89,507) sq.m. During the reporting period, the average occupancy rate of the properties was approximately 73%. (2022: 86%). The Group generated a rental income of approx. RMB 16.2 million (2022: RMB 20.0 million), representing a decrease of approx. RMB 3.8 million as compared to the same period last year, mainly due to the drop in the occupancy rate.
Property Management Service
The Group has a professional property management team to provide management services to Everbright Financial Center and Everbright International Mansion to maximize the value of the properties. During the reporting period, revenue from the property management services was approx. RMB 5.9 million (2022: RMB 7.1 million), representing a decline of approx. RMB 1.2 million as compared to the same period last year, mainly due to the rise in the vacancy rate of the properties.
Investment Properties
As at 30 June 2023, the fair value of the investment properties was RMB 959.5 million (31 December 2022: RMB 954.1 million). For the six months ended 30 June 2023, the valuation gains on investment properties amounted to approx. RMB 5.4 million (2022: RMB 0.7 million), representing an increase of approx. RMB 4.7 million as compared to the same period last year.
As at 30 June 2023, the Group maintained cash and bank balances of approx. RMB224.0 million (31 December 2022: RMB214.9 million). The Group’s gearing ratio, being measured by the Group’s total liabilities over its total assets, was 19.0% (31 December 2022: 18.3%). The Group’s liquidity position was well-managed.
During the reporting period, the Group’s tenants, lease contracts, and occupancy rates have remained relatively stable. Although market fluctuations may persist in the second half of the year, we anticipate that with the stable business performance of our clients and the stability of our lease contracts, the occupancy rate has likely reached its bottom and will remain stable or gradually improve in the future, and the rental prices will also continue to stabilize.
Prospects
In the first half of the year, the Group’s property leasing business was inevitably impacted by the series of unstable risks that still hampered the overall business environment, along with higher interest rates in the global market, the relatively subdued consumer sentiment in mainland China and the lack of significant pickup in the real estate market. However, leveraging the abundant cash reserves and absence of debt, the Group is well-positioned to capitalize on the high-interest rate environment to generate more interest income. Benefiting from the synergy created by the China Everbright Group and the popularity of the “Everbright” brand, the Group can maintain a friendly long-term cooperation that is mutually beneficial and creates a win-win situation that contributes to the stable growth of its leasing business. In the second half of 2023, the Group plans to continue expanding the scale of property management services and will pursue three key development strategies of increasing leasing activities, optimizing capital management, and exploring new investment opportunities. By increasing leasing volume and utilizing its funds prudently, the Group aims to achieve stable and robust investment growth.
Looking ahead, the central government remained committed to driving economic growth by introducing a series of revitalization policies, which are expected to stimulate the housing and rental markets and positively impact stabilizing the growth of the property management industry. Given the unstable international environment, the Group maintains a cautious approach towards acquiring overseas properties. On the contrary, should opportunities arise in mainland China, the Group will consider the acquisition of high-quality projects to diversify our business portfolio and generate long-term investment returns. Simultaneously, the Group will actively optimize and enhance our service quality and user experience to further strengthen our competitiveness and resilience, and strive to achieve long-term, stable and abundant profits for our shareholders.
About Everbright Grand China Assets Limited
Everbright Grand China Assets Limited, a subsidiary of China Everbright Group, principally engaged in the businesses of property leasing, property management, and sales of properties held for sale, owns, leases, and manages properties located in Chengdu, Sichuan province, and also owns and leases a property located in Kunming, Yunnan province. The properties are located in the city of Chengdu and Kunming, the key cities of western China. The property portfolio comprised three commercial properties, namely Everbright Financial Center, part of Everbright International Mansion and Ming Chang Building.
For further details regarding to Everbright Grand China Assets Limited, please visit its website at https://ebgca.com.hk/.
Topic: Press release summary