Sunac to step up efforts to lower debt ratio

Sunac China Holdings Ltd, one of the country's major property developers listed in Hong Kong, will make more efforts to lower its debt ratio in order to achieve sustainable development in the long run, the company's executives said.

The net debt ratio of the company slumped 23 percentage points in the first half of 2020 to 149 percent. The data is expected to keep decreasing by the end of 2020, and the target for next year is under 100 percent, said Wang Mengde, CEO of Sunac, at its online interim results release conference.

Efforts include increasing the proportion of bank financing and open market bond financing, repaying high-cost trusts in advance, and tightening regulations, in order to optimize financing structure and lower financing cost.

From January to June, Sunac strictly controlled land purchasing and only bought a small amount of land at a reasonable price. Investment in land shrunk 64 percent year-on-year.

Sun Hongbin, the company's chairman, said Sunac will keep a close eye on land parcels in first- and second-tier cities, though he also believes there are lots of potential risks in seizing land parcels right now.

By the end of June, Sunac had 248 million square meters of land parcels valued at over 3 trillion yuan, with 80 percent in first- and second-tier cities. The company is quite cautious in increasing its land parcels in the first half of the year, with the newly added land reserves rising 17.3 million square meters, down 64 percent year-on-year, according to its interim statement.

Meanwhile, due to COVID-19's impact on the international travel market, Sun also believes that there will be more opportunities in the holiday market in the future, and the company will also explore this emerging sector.

And the company is also committed to the high-end residential market by launching more One Sino Park developments, the top-end of its product portfolio. It just introduced one such project in the capital's Haidian district, close to Xiangshan Mountain and the Summer Palace, bringing the total number of the developments up to 16 across the country.

In the first half of 2020, the company's revenue hit 77.34 billion yuan ($11.2 billion). Its core net profit grew 3 percent to 13.04 billion yuan. Its sales reached more than 195.27 billion yuan, ranking fifth among real estate companies in China. Sales in July alone surged 26.97 percent year-on-year to 52.25 billion yuan. The company's cash balance stands at 120.9 billion yuan, according to an interim statement.