(Yicai Global) April 1 -- Real estate developer China Evergrande Group has unveiled a grand plan to trim its debts while boosting annual revenue to CNY1 trillion (USD141 billion) within the next three years.
To reach that goal it would need to more than double its 2019 revenue, which came in 2.4 percent higher than the previous year at CNY478 billion, according to the Shenzhen-based firm's full-year financial report published yesterday. Net profit dived 48 percent to CNY40.8 billion (USD5.7 billion), with cash up 12 percent at CNY228.8 billion.
Shares in the firm climbed as much as 11.35 percent over yesterday's close in the morning session, but finished the day just 1.56 percent higher at HKD13.06 (USD1.68). The benchmark Hang Seng Index ended down 2.2 percent.
This year will be extremely important for Evergrande as it looks to shed its land reserves to pay off debts, Chairman Hui Ka Yan said, adding that the firm hopes to cut debts by CNY150 billion per annum for the next three years. The company had a net gearing ratio of 159.4 percent last year, up 7.4 points annually.
Evergrande has around 293 million square meters of land at present, with a total saleable area of 132 million square meters worth CNY1.3 trillion this year, according to management. It estimates it will sell 64 percent of that in 2020, bringing in around CNY811 billion.
The firm generated CNY601 billion from the sale of 58.5 million square meters of land last year, ranking third among Chinese developers, but it is also one of the most leveraged. Evergrande's assets jumped 17.34 percent to CNY2.2 trillion at the end of last year, while liabilities climbed 17.63 percent to CNY1.85 trillion, according to its financial report.
Editor: James Boynton