KWG Property Holding Limited Announces 2017 Annual Results

Reinforcing Existing Regions

Core Profit for the Year Increased to Approximately RMB3,523.1 Million

Stepping Up Efforts in Developing New Cities

with Focus on Greater-Bay-Area and Yangtze-River-Delta Area

Financial Highlights:

HONG KONG, CHINA - Media OutReach  - 23 March 2018 -  KWG Property Holding Limited ("KWG Property " or the "Group ", 1813.HK), one of the leading property developers in Guangzhou, announced today its annual results for the year ended 31 December 2017.

During the year under review, the Group recorded a total revenue of approximately RM B11,543.1 million, representing an increase of 30.2% over the corresponding year in 2016. Gross profit reached approximately RMB 4,019.9 million , and gross profit margin was approximately 34.8%, representing an increase of 0.2 percentage points year-on-year . Profit attributable to owners of the Group was approximately RMB 3,620.1 million. Core net profit totaled approximately RMB3,523.1 million, representing an increase of 20.6% year-on-year. Earnings per share were RMB 117 cents. The Board of Directors recommended RMB 31 cents per share as the final dividend for the year ended 31 December 2017. Including interim dividend, full year dividend was equivalent to RMB41 cents per share.

In 2017, the disparity in regulatory measures adopted by local governments increased as the Central Government continued to emphasise the provision of accommodation as the primary purpose of real estate properties. Demands from investors and speculative buyers were suppressed as the results of implementation of restrictions on purchase, mortgage, pre-sales and other financial and supervisory measures for real estate. The focus of market regulation and control was put on tier-one cities, key tier-two cities and those tier-three and tier-four cities around tier-one cities. The real estate markets became popular in cities such as Chongqing, Chengdu and Xi'an as regulations in most of tier-two and tier-three cities were relatively loosen because of destocking. The market momentum w as still maintained in other cities such as Wuhan, Hangzhou, Tianjin and Nanjing, where stable growth w as seen. During the year under review, the Group closely monitored the implementation of regulations and control measures adopted by local governments and made timely adjustment on its selling plans and product mixes so as to launch suitable products that met market demands. Among st the 5 3 projects currently on sale, 45 % of the gross pre-sales were derived from Southern China and 35 % were contributed from Eastern China . Gross pre-sales for the year of 2017 amounted to RM B 38.0 billion in aggregate, representing a year-on-year increase of 33.2% as compared to that of last year, while attributable pre-sales amounted to RMB28.7 billion in aggregate, representing a year-on-year increase of 28.7% as compared to that of last year. The average selling price ("ASP") was RMB14,920 per sq.m. in Southern China and RMB20,218 per sq.m. in Eastern China. The overall ASP for the year of 2017 was approximately RMB16,819 per sq.m., representing a year-on-year increase of 18.7% as compared to that of last year.

During the year under review, the Group launched a total of 12 brand new projects, namely Yunshang Retreat in Chengdu, Puli Oriental in Hangzhou, Fortunes Season in Guangzhou, The Riviera in Foshan , Suzhou Beiqiao Project ( 蘇州拾鯉 ), Exquisite Bay in Xuzhou, Fragrant Seasons in Nanning, City Moon in Hefei, The Riviera in Hangzhou, Joyful Season in Wuhan, Jiaxing Haiyan Project , Lujiang The One in Hefei, of which Xuzhou, Hefei, Wuhan and Jiaxing were the new cities that we launched for the first time . The project series we launched included The Riviera, a high-end brand, and Fragrant Seasons projects that perfectly matched with their surrounding scenic natural landscapes.

The Riviera in Foshan is located in Beijiao New Town, Shunde District, Foshan, the interchange of Guangzhou Metro Line 7 and Foshan Metro Line 3 that linked Guangzhou and Foshan. Close to Guangzhou, the project is well positioned in prime location with excellent ancillary commercial and residential services. The project was first launched in the second half of 2017. The Project suited local market demand and comprised fitted units with GFA of 97--141 sq.m., targeting to first-time home buyers and upgraders. Fragrant Seasons in Nanning is located in Wuxiang New District, Nanning, adjacent to Wuxiang Mountain Forest Park with a panorama view of Wuxiang Lake Park in the south. The project is designed as a harmony blending of forest landscape and living environment. The project mainly offers fitted units with GFA of 85-126 sq.m. Since its first launch in October, the project has been receiving much enthusiasm by local buyers.

With regards to land bank, in order to accelerate its future development, the Group focus ed on further penetration into South China and East China and expansion of its reach into North China and Southwest China. The Group, on the one hand, obtained premium land sites through tender, auction and listing in the open market on its own and, on the other hand, continued to actively merge and acquire land sites from secondary market to replenish its land bank with reasonable prices. In the meantime, the Group also successfully acquired projects with substantial growth potential such as Joyful Season in Wuhan and Bantian Project in Shenzhen by ways of mergers, acquisitions and urban redevelopment in Wuhan and Shenzhen.

During the year under review, the Group acquired 35 land sites in Mainland China and Hong Kong adding GFA of 5.31 million sq.m., at an average cost of RMB5,000 per sq.m. (excluding Hong Kong).

As of 31 December 2017, the Group owned 101 projects in 29 cities across Mainland China and Hong Kong with an attributable land bank of approximately 13.25 million sq.m.. Including unlisted urban redevelopment projects, the Group's current attributable land bank is approximately 18 million sq.m..

The Group made reasonable arrangement of financing activities by flexibly availing itself of different sorts of financing channels according to changes in the capital market. During the year under review, the Group issued six tranches of offshore USD bonds with favourable coupon rates, the proceeds of which were utilised to call the bonds issued in previous years with higher interest rates and manage operation capital. Two tranches of domestic RMB bonds were also issued to repay borrowings of the Company.

The Group has managed to sustain steady growth in its hotel business and investment properties. As at 31 December 2017, the Group had seven hotels in operation, of which five hotels were located in Guangzhou, one hotel in Hangzhou and one hotel in Chengdu. During the year under review, revenue from hotel operation amounted to RMB424.5 million, representing an increase of 8.9% as compared to that of last year. In December 2017, Shanghai U Fun, the Group's first shopping mall, held a grand opening ceremony. Located in Xinjiangwan, Shanghai and surrounded by mature residential areas and office buildings, Shanghai U Fun fills the lack of large commercial facilities in this area. With the introduction of Hema Supermarket ( 盒馬鮮生 ), Little SOCIUM, a customized cinema and an indoor skiing theme park, the shopping center attracts consumers in and around the district. The shopping center recorded a total of 200,000 visitors for first two days after its opening. As at the end of 2017, the occupancy rate of Shanghai U Fun reached approximately 90%.

Looking ahead, Mr. Kong Jian Min, Chairman of the Group stated that, " The Group solidly positions in Greater-Bay-Area and Yangtze-River-Delta Area with abundant land bank . In 2018, the Group will accelerate the construction progress of its new projects and launch them at the right time . Based on the Group's existing land bank, the scheduled new start of construction and launch plan in 2018, t he Group expects that the sellable resources will increased to RMB110.0 billion in 2018 . First and second-tier cities contribute over 90% of sellable resources value. The pre-sales target of the Group in 2018 is RMB65 billion.

In 2018, the Group expects to launch over 20 new projects including Beijing KWG Center, Shanghai Glory Palace, Hangzhou Sky Villa Mansion, Tianjin The Cosmos, Suzhou Wujiang Project, Guangzhou Nansha Shuilian, Taicang Project, Nantong Tongzhou Project, Wuxi Huishan Project, Huizhou Longmen Project etc.

With regard to our commercial properties, the Group plans to launch three series of long-term rental apartments, catering for the need of different consumers. The Group will first launch long-term rental apartments in tier-one and key tier-two cities such as Guangzhou, Shenzhen, Shanghai, Nanjing and Chengdu as a trial. It is expected that the apartments will be offered for rent as early as in 2018 . Based on the investment properties ready to launch, the Group expects that the leasable GFA of investment properties will be over 2.7 million sq.m. in the year of 2020. "

About KWG Property (HKSE stock code: 1813)

Established in 1995, KWG Property is one of the leading property developers focusing on mid to high-end properties with premium quality in prime locations in Guangzhou. Going through 23 years of development, the Group has an efficient property development system, as well as a balanced product portfolio which includes mid- to high-end residential properties, serviced apartments, villas, office buildings, hotels and shopping centers . Currently, the Group has expanded to high potential markets outside of Guangzhou. A strategic development framework has been formed, with Guangzhou, Shenzhen, Foshan, Zhongshan, Zhaoqing, Hainan , Nanning and Liuzhou as its hub for South China, Suzhou, Shanghai, Hangzhou, Nanjing, Hefei, Xuzhou, Jiaxing, Changshu, Lishui, Taicang , Taizhou , Wuxi, Nantong and Shaoxing for East China, Beijing, Tianjin, Jinan, Chongqing, Chengdu and Wuhan for other regions. T he Group has succeeded in opening up overseas market by establishing presence in Hong Kong.