Chairman Statement

Dear Shareholders,

On behalf of the Board, I am pleased to present Ying Li International Real Estate Limited's ("Ying Li" and together with its subsidiaries, the "Group") annual report for the financial year ended 31 December 2018 (FY2018).


2018 was a challenging year, with the world economy full of uncertainties and the increased downward pressure on China's economy. Despite the complicated macroenvironment and the arduous tasks to reform, Chinese's economy progressed at an overall relatively stable trend, with a gross domestic product ("GDP") growth rate of 6.6% year-on- year ("Y-o-Y") and reached a total of RMB90,031 billion in 2018. This growth rate was the highest among the world's top five economies. With the backdrop that China's economy has entered into a new normal, the pressure on Chongqing's economic development has also increased. However, despite of this, Chongqing's economy remains stable and its quality and efficiency have both improved. In 2018, Chongqing's GDP exceeded RMB2 trillion, with a 6% Y-o-Y increase.

While China real estate market remained at a high level in 2018, the rapid growth phase has basically ended. The transaction volume of new house and second-hand house remained similar to that in 2017. Under the central government's spirit of "housing is for living in, and not for speculation" and guidance given on city-specific policies, new local policies continued to rein in. As a result, 2018 has become the year with most intensive real estate regulations implemented in the history. When the market started to cool off in the second half of 2018, selected regulatory policies were loosened slightly in 4Q2018. At Chongqing's local policy level, some loosening policies introduced include lowering of mortgage interest rate premium and removal of sales restrictions.

At the overall level, the national commercial housing areas sold and amount transacted was 1,717 million sqm, a 1.3% Y-o-Y increase and RMB15 trillion, a 12.2% Y-o-Y increase respectively in 2018. As for Chongqing real estate market, it basically continued the previous year's control policies, and introduced new regulating policies to standardize the mortgage registration for commercial housing still under construction. In addition, Chongqing has also strengthened market supervision to ensure the market develops steadily and healthily. Overall, the Chongqing commercial housing areas sold and amount transacted was 65 million sqm, a 2.6% Y-o-Y decrease and RMB527 billion, a 15.7% Y-o-Y increase respectively in 2018.


As a property developer engaged in both commercial and residential property developments, and in view of the complexities of macro and micro environment, Ying Li adopted a conservative development strategy in 2018. Together with the efforts put in by all the employees, the Group delivered a healthy and stable financial performance for FY2018.

Key highlights of the year include:

  • The sale of properties revenue in 2018 mainly comes from Lion City Garden project, Ying Li International Hardware and Electrical Centre (IEC) project and the sale of some previously completed properties.
  • The increase in total rental income was mainly due to the gradual increase in the occupancy rate at the retail properties.
  • The Group has completed the land transfer transaction with China Evergrande Group, which has resulted in the increase of the Group's Other income.
  • The Beijing Tongzhou project development progress smoothly and its maiden office tower sales had resulted in a fair value gain for the Group's investment in the project.
  • The Group's total borrowings fell from RMB3.9 billion as of 31 Dec 2017 to RMB3.3 billion as of 31 Dec 2018.


The Group currently has two projects underdevelopment, namely Lion City Garden and Ying Li International Hardware and Electrical Centre (IEC). The Lion City Garden is at the final phase of development, Phase 2D, and the bespoke development IEC project is at Phase 1B and 2B. Substantial of Phase 1A and Phase 2A IEC buyers have renovated their shops and are progressively conducting businesses at the centre. On 30 November 2018, the IEC Opening Ceremony was successfully held. The Jiangjin Comprehensive Bonded Zone, where the IEC project is located, is at the junction of the "One Belt and One Road" and the "Yangtze River Economic Belt". Eastward, it connects with river-sea combined transport along the Yangtze River Golden Waterway; westward, it connects with Central Asia and European region through CHINA RAILWAY Express (Chongqing); and southward, it connects with the ASEAN countries through the "Land-Sea Trade Corridor" of Sino-Singapore interconnection project. With the opportunities brought by "One Belt and One Road", IEC project has also become "Chongqing Jiangjin-Guangxi Fangchenggang Inter-regional Cooperation Demonstration Project" and "Chongqing – ASEAN Hardware Machinery and Electrical Export Collection Center". The project has a very promising future.

On office rental front, the Group continues to optimize its IFC office rental, focusing on retaining existing quality tenants and attracting new tenants. On the retail segment front, the Group continues to optimize and/or sharpen its focuses on targeted consumers at both Ying Li IMIX Park Jiefangbei mall and Ying Li IMIX Park Daping mall. Firstly, with the increase in domestic tourists flowing into Chongqing, especially during the China holiday periods, the Group will sharpen its IFC mall's retail focuses and target to capture a share of the tourist spending. Secondly, with the high occupancy rates in excess of 90%, both malls will continue to undergo space optimization process to increase the leasable areas. Thirdly, Ying Li IMIX Park Daping mall further strengthens its focus as a local community mall with higher proportion of spaces allocated to products and services needed by the nearby residences, including enrichment/education centres, popular book and stationery store and baby/children-centric stores.

Besides these, the Group's investment in Beijing Tongzhou – Beijing New Everbright Centre remains promising and the construction progressing smoothly. Concurrently, the Group will continue to optimize internal control systems to improve management efficiency and at the same time adhering to corporate governance guidelines.


Looking ahead, the international environment is becoming more complex and severe. The economic condition of China is expected to remain challenging as the uncertainty of the global economy continues to loom and China continues to undergo structural reform. Overall, China is still in an important strategic and opportunity period. We believe China's economy will continue to grow steadily in 2019.

We continue to be optimistic about Chongqing's urban development. The favorable geographical location of Chongqing, especially the numerous opportunities brought forward by "One Belt and One Road" and "Yangtze River Economic Belt", and the increasing attractions of cities, will continue to drive Chongqing's economic growth.

However, we also clearly understand that the current China real estate market is full of challenges. On the policy perspective front, city-specific policies will be still the main factor driving real estate regulations in 2019. On the market perspective front, Chongqing's "online celebrity effect" on economy will determine its retail constitution.

In view of the above, the Group will continue to pay close attention to the uncertain macro environment and at the same time, take into consideration of the current policies and market conditions, to adopt a prudent financial and investment strategy so as to cautiously seek new development and investment opportunities in the first-tier and fast-growing second-tier cities.


On behalf of the Group, I would like to express my heartfelt appreciation to all shareholders, customers and partners who have bestowed us with their long-term support and understanding. At the same time, I would like to extend my sincere thanks to the board of directors, the management team and all staff of the Group.

We will continue to do our best to ensure the Group grows steadily in the years to come.

Yours sincerely,

Fang Ming
Executive Chairman & Group CEO