Unaudited Financial Statements and Distribution Announcement For the Second Quarter and Half Year Ended 30 June 2019

Financials Archive

Get Adobe Reader Note: Files are in Adobe (PDF) format.
Please download the free Adobe Acrobat Reader to view these documents.

Profit & Loss

Balance Sheet

Review of Performance

Total outlet sales of RMB 1,026.7 million for 2Q 2019 (a period of 91 days) were RMB 98.7 million or 10.6% higher than the period from 28 March 2018 (Listing Date) to 30 June 2018 (a period of 95 days). If total outlet sales for the period from 28 March 2018 (Listing Date) to 30 June 2018 has been restated based on the same 91 days, the total outlet sales for 2Q 2019 would be RMB 136.7 million or 15.4% higher.

The consistent growth in the outlets' sales is due to the following positive factors:

  • Outlet malls is a fast-growing business and well accepted by the growing consumers groups in China
  • Sasseur's strategy of incorporating sales, lifestyle and experiential shopping in its malls
  • Injecting a strong dose of art into commerce as a differentiating factor between Sasseur and other shopping malls
  • Make sure that Sasseur does not follow the homogeneous commodity trap faced by other shopping malls
  • Regular and big scale seasonal sales promotion

Similar to outlet sales, for the EMA rental income (excluding straight-line rental accounting adjustment), if the period from 28 March 2018 to 30 June 2018 has been restated to 91 days for comparison purpose, the EMA rental income for 2Q 2019 would be 2.7% higher compared to same period last year.

The period from 28 March 2018 to 30 June 2018 included IPO transaction costs of S$11.1 million which was a one-off expense and not recurrent in this quarter. As a result, total return after tax of S$14.3 million for 2Q 2019 was higher during the period from 28 March 2018 to 30 June 2018.

Overall, the total return available for distribution to Unitholders of S$19.2 million for 2Q 2019 was 2.3% higher than the period from 28 March 2018 to 30 June 2018 largely due to the statutory reserve transfer that was assumed in the comparing period and which is no longer necessary in the quarter and going forward.


China’s gross domestic product (GDP) was RMB45,093 billion yuan in the first half of 2019, a year-on-year increase of 6.3%1 at comparable prices. The second quarter GDP growth in China for 2019 was 6.2%. This is slightly lower than the 6.4% in the first quarter, mainly attributable to the effects of the trade war with the US. Nevertheless, the urban household per capita disposable income grew by 8.0% for the second quarter of 2019 compared to the same period in 2018. Based on data from the China’s National Bureau of Statistics, total retail sales of consumer goods continue to grow in June 2019 to reach RMB3,388 billion, up by 9.8% Y-o-Y nominally. On a cumulative basis, the retail sales achieved RMB9,742 billion for second quarter of 2019, up by 10.8% Yo-Y for the second quarter of 2019.

The Chinese economy might be weighed down by challenges on the export fronts, given the uncertainty of a trade deal with the US. Domestic consumption however is expected to remain healthy, driven by a growing and increasingly affluent middle class. The Sasseur’s outlet business remains resilient and is expected to continue posting good growth mainly due to:

  1. A young outlet industry that continues to grow at a fast pace;
  2. Targeting the correct customer segment, the Chinese middle income class, which continues to grow in numbers and spending;
  3. Sasseur’s double destination shopping positioning as both an outlet and lifestyle and experiential mall puts Sasseur in good stead against other traditional shopping malls or outlets;
  4. A business model that aligns the interests of the brand tenants, the outlet operator and landlord, and
  5. Strength of operations in driving sales through seasonal sales promotions, etc.

Chongqing Market Update

An estimated retail gross floor area (GFA) of around 780,000 sqm will enter the Chongqing market in 20192.This may lead to an oversupply of consumer goods in the short-term and impact the share of sales achieved by normal shopping malls in the region. However, recent tax cuts in Chongqing may help to bolster retail sales and improve the performance of Sasseur’s Chongqing and Bishan outlet malls.

Hefei Market Update

As announced on 14 May 2019, Sasseur acquired additional shop units with existing tenancies at the annex block of its Hefei Outlets. The yield-accretive acquisition, based on pro forma, is expected to increase DPU and NAV per unit. Sasseur increased its ownership of Hefei site from 77.8% to 81.2% of total GFA, which will accelerate asset management initiatives to generate future growth and potential value uplift.

For second quarter of 2019, there were no opening of new outlet malls in Heifei, and Sasseur’s Hefei Outlet remains on track for strong growth.

Kunming Market Update

No new outlets opened in second quarter of 2019. The sales outlook for Sasseur’s Kunming outlet remains robust.

Barring any unforeseen circumstances, retail sales for Sasseur’s four outlet malls are expected to continue growing throughout FY2019. Trade negotiations between US and China continues but our outlet sales in China continues to be resilient as it is largely fuelled by domestic consumption.

1 China’s National Bureau of Statistics
2 Savills Research Report