Property Market Policy Adjustment Without Disruption

It is rumored that the government will soon announce the conversion of some private residential land to subsidized housing land and the introduction of vacant taxes. Far East Development (00035) Managing Director Kong Xiangda [map] said that it will closely monitor local real estate market changes but believe that Supply falls short of demand, leading to high property prices and whether buyers’ affordability can catch up with property prices. He believes that the government’s adjustment of the property market policy is correct, and hopes that the new policy can solve the problem of insufficient land supply and the affordability of the people. He also pointed out that the Group’s Hong Kong business mainly focuses on the hotel industry, and that the housing policy changes have little effect on the company.

Yuanzhan announced its annual results yesterday. As of the end of March this year, the annual net profit was 1.567 billion yuan, a year-on-year increase of 40.2%; revenue was 5.831 billion yuan, up 16.49% year-on-year. Earnings per share of 0.69 yuan, the final dividend of 18 cents per share, more than 20% per year.

Development Strategy Focuses on China Hong Kong Star

The Group’s three core businesses all recorded growth, with revenue from sales of residential properties at approximately RMB 3,431 million, an increase of 16.8%; revenue from hotel operations and management sales of approximately RMB 1.5 billion, up 17.5%; and parking lot and facilities management business increased by 3.9%. 6.66 billion yuan. Kong Xiangda pointed out that the company has confidence in the pricing of real estate in Hong Kong. The current total sales amounted to more than 50 billion yuan. Last year it launched more than 9 billion yuan worth of real estate and cashed in more than 6 billion yuan. Sales this year are expected to be similar to last year.

Kong Xiangda pointed out that the advantage of this group lies in its clear positioning and the development strategy of using the “Asian footprint.” He added that Asia’s population is as high as 4.5 billion, and China’s outbound tourism spending totaled approximately US$190 billion in 2017. This shows that there is great potential for growth in the Asian market. The company is focusing on markets such as Hong Kong, China, and Singapore.