· Core operating performance positive across the board, with revenue up by 28.0% to RMB351m, core net profit significantly up 73.2% year-on-year to RMB236m, occupancy rate up 3.4% to 91.4%, completed logistics parks up 7.7% to 2.8 million sq.m., year on year
· Co-investment partnership with institutional investors continued to help the Company enhance market share and diversified income
· China’s premium logistics facilities remained in persistent
short supply and a sector with favorable government policy
26 August 2019, Hong Kong – China Logistics Property Holdings Co., Ltd (“CNLP” or the “Company”, together with its subsidiaries, the “Group”; Stock code: 1589), a leading provider of premium logistics facilities in China, today announced its interim results ended 30 June 2019.
In the first half of 2019，due to an increase in economies of scale from the Group’s growing operation scale, the Group’s revenue significantly increased by 28.0% to RMB 351 million year-on-year, registering a growth profit of 275 million representing a growth of 37.8% and a core net profit of 236 million representing a year-on-year growth of 73.2%, showing positive core operating performance.
During the period under review, the Group’s occupancy rate soared further by 3.4% to 91.4% year on year. Total completed gross floor area (GFA) of logistics parks held by the Group increased by 7.7% y-o-y to 2.8 million sq.m. and total GFA of logistics parks held under co-investments reached 0.3 sq.m., with total GFA of logistics property under development or reposition at 0.9 million sq.m. and total GFA of assets held for future development at 0.7 million sq.m.
Mr. LI Shifa, Chairman, CEO and President of CNLP, said: “Our premium logistics facilities business maintained good momentum in the first half, supported by the growing domestic consumption and e-commerce market in China. We continued to record strong performance and growth across core operations, in particular achieving ultra-high occupancy rate with our premium logistic facilities and nimble leasing strategies. The co-investment partnership with institutional investors continued to help us enhance market share, transform into an asset-light model, maintain a lower leverage and more diversified income overall, as we build new facilities and maintain abundant land reserve. We will strive to maintain our leading position in the industry, realize economy of scale and sustainable growth, with the vision to become the largest provider of premium logistics facilities in China.”
China's logistics facilities are far behind that in the developed economies, both in terms of quantity and quality. Therefore, industry leaders are exposed to enormous growth opportunities in acquiring land and developing investment projects. In 2019, the Chinese government announced its aim to further lower the ratio of the total social logistics cost to GDP by 1-2% from the current ratio of 14.6% by in three to five years.
On the other hand, greater disposable income continues to drive increased contribution to the overall economy in China. While the demand for logistics facilities has been bolstered by this trend, premium logistics facilities are particularly sought after, driven by the high standards and required in the new retail/ e-commerce era. All the clients, including third-party logistics providers, retailers, manufacturers and e-commerce companies, are looking for the most efficient logistics facilities. They do not only need to deal with the more regular end-to-end delivery required by traditional retail, but also online shopping orders from all directions. Consumer goods have to be delivered to their customers at lowest cost and highest efficiency in order to maintain competitiveness. This means that the market demand for logistics facilities will be higher both in terms of quantity and quality, particularly the strength of the nationwide network of logistics facilities. These together present optimistic and robust growth opportunities for CNLP as a leading player in the industry.