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China Logistics Property Announces 2020 Annual Results


Business Records Steadily Growth amid Pandemic

Revenue up 12.1% to RMB799 million
Gross Profit up 13.1% to RMB618 million
Core Net Profit up 12.3% to RMB510 million
• Core operating performance continues an upward trend, revenue up 12.1% toRMB799 million, with gross profit and core net profit up 13.1% to RMB618 million and 12.3% to RMB510 million respectively.
• Occupancy rate for stabilized logistics parks remains high at 90.2%; gross floor area (GFA) of investment projects is approximately 4.54 million sq.m.

Steadily developed investment fund project. The transaction of the second phase of the fund with LaSalle Investment Management Asia Pte. Ltd. was completed in June 2020, thus accelerate the Group’s transformation towards an asset-light operation model.          

(30 March 2021, 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 logistics facilities in China, today announced its annual results for the year ended 31 December 2020.

In 2020, the COVID-19 pandemic severely impacted the global economy; however, the development resilience of the domestic logistics industry and the Group's development capabilities emerged during the pandemic. Amid the operation uncertainty, the Group maintained its excellent operation and financial position. Revenue increased 12.1% year-on-year to RMB799 million, core net profit[1] increased 12.3% year-on-year to RMB510 million, which accounted for 63.9% of the total revenue of the Group. Profit for the year decreased to RMB66.62 million, mainly due to the fair value losses on convertible bonds issued in June 2019 and November 2020 by the Company. The increase was primarily attributable to a continuous rise in Group’s share price in 2020, which increased the value of the convertible bonds. If factor out the fair value losses on convertible bonds, profit for the year was RMB869 million, representing an increase of 124.5% as compared to that of 2019’s. While the fair value losses on convertible bonds is a non-cash charge, it doesnot affect the Group’s liquidity. The Group's cash flow remained stable, and its cash and cash equivalents for the year reached RMB1,033 million.

Despite the impact of the COVID-19 pandemic, the Group’s stabilized logistics parks maintained a high occupancy rate at 90.2%. The Group will continue to maintain constant dialogues with both existing and prospective tenants to manage lease renewals and fill up vacancies at its logistics facilities in a timely and efficient manner. In particular, the Group will continue to leverage the strong network effect of its logistics facilities portfolio to attract existing and prospective tenants with a view to expanding the Group’s national
footprint in China. In view of the continuous growth of China’s domestic consumption and e-commerce market as well as the strong growth of emerging industries such as new retail, the Group will continue to optimize its tenant portfolio and increase the proportion of such companies to better meet the market demand. In 2020, tenants in e-commerce and third-party logistics ( the“3PL”) providers accounted for approximately 87.0% of the overall leasing segment.
To strengthen nationwide network across major logistics hubs remains the Group’s development focus. The Group has continued to strengthen its nationwide network of logistics facilities by developing its land held for future development and acquiring new land for investment projects, identifying new investment projects and selectively acquiring existing logistics facilities. Going forward, the Group plans to continue its focus in regions that are more economically developed, such as the Guangdong-Hong Kong-MacaoGreater Bay Area, Yangtze River Delta economic zone, the Bohai economic zone and the Pearl River Delta economic zone, as well as other selected provincial and logistics node cities, to continuously strengthen its nationwide network. For example, in the Greater Bay Area, in addition to its existing Zhaoqing and Huizhou projects, which have been in operation, the Group will ride on the opportunity brought by the country’s promotion of the construction of the Greater Bay Area and the integration of the Yangtze River Delta to actively seek new investment opportunities in the region with an aim to continue to build a network of logistics facilities in the region.
The Group continues to accelerate the development of the two-pronged asset-light business model. Despite the impact of the COVID-19, the Company entered an agreement on the second phase of the fund with LaSalle Investment Management Asia Pte. Ltd., jointly investing RMB663 million to set up a core fund to operate China Logistics’ warehousing projects in March 2020. It has taken on the role of an asset manager to provide project and property management services for the projects since then. This project was completed in end of May and early June 2020 respectively. As of 31 December 2020, the Company has been involved in fund projects covering 1 million sq.m. with an asset management scale of RMB5 billion.
Mr. LI Shifa, Chairman, CEO and President of CNLP, said, “The global economic recovery trend has been reinforced since 2021. With respect to the domestic economic situation in China, as regular prevention and control of the COVID-19 has been brought to the daily routine, the economic activities will still be impacted to a certain extent. However, the overall economic activities have been fully restarted. The government has continued to introduce various economic recovery policies and the resultant significant rebound or narrower decline in a number of economic indicators since March 2020 has demonstrated a strong self-adjustment ability of the country. The logistics industry and warehousing facilities will continue to benefit from China’s fast-growing economy. The Group will continue its efforts to achieve its goal to develop into the largest provider of premium logistics facilities in China and maintaining its leading position as a premium logistics facilities provider in China.”

[1] The Group defines its core net profit as its adjusted EBITDA, which consists of profit for the year, adding back our interest expense on borrowings, other losses, net exchange losses, income tax expense, amortization expense and depreciation charge, further adjusted to deduct our other income, fair value gains on investment properties — net, fair value losses on convertible bonds — net and other gains, interest income on bank deposits, net exchange gains and share of profit of investments accounted for using the equity method.