[For immediate release]
[Hong Kong, 20th September, 1999] - Hopson Development Holdings Limited ("Hopson Development", together with its subsidiaries the "Group"; stock code: 754) is pleased to announce its unaudited consolidated results for the six months ended 30th June, 1999. During the period under review, the Group's turnover amounted to HK$ 625,997,000, maintained at a similar level as compared to the same period last year. Profit before taxation increased 9.9% to HK$246,010,000. However, the Group adopted prudent accounting principles and made provision for land appreciation tax which resulted in a significant increase in tax expenses. Hence, profit attributable to shareholders decreased 17.6% to HK$ 118,110,000.
Both basic earnings per share and diluted earnings per share were HK12 cents. The Board of Directors has recommended the payment of an interim dividend of HK3 cents per share in respect of the six months ended 30th June, 1999.
Commenting on the interim results, Mr. Stones Tse, Managing Director of the Group, said, "During the period under review, the Group's profit margin actually increased. Profit margin before tax for the first half of 1999 was 39.3% when compared with 36% for the same period last year. Profit before taxation also recorded satisfactory growth. Under these circumstances, the major reason for decreasing profit attributable to shareholders was the Group's prudent provision for land appreciation tax."
He explained, "The Group is used to making sufficient provisions to prepare itself for changes that might happen. The provisions do not have a material effect on the Group's cash flow and actual return."
Commenting on the operating environment in the past six months, Mr. Tse said, "In the first half of 1999, Guangzhou City recorded a 12% economic growth rate, the highest amongst major cities in China and well over the national GDP growth rate. The activities of the City's property market have been maintaining at a steady level. According to the statistics of Guangzhou Real Estate Information Centre, in the first half of 1999, pre-sale floor areas and transaction value of commodity properties in Guangzhou City slightly dropped by 7.75% and 7.55% respectively over the same period in 1998. The main reason for the difference can be accounted to the contraction of institutional buyers in the first half of 1999 as compared with same period last year. However, there was a steady growth in respect of the buying forces of individual purchasers. Secondary property market has also recorded marked increases in both transaction area and transaction value."
With its established reputation and proven track record, the Group's sales performance remained satisfactory. Mr. Tse said, "During the period under review, the Group achieved property sales of approximately 120,000 sq.m., or approximately 1,160 residential units. The Group maintained as one of the top-selling property developers in Guangzhou City.
"We are pleased to report that during the period under review, all of the Group's projects were progressing well, most of which were ahead of schedule. 12 mid-rise blocks of Gallopade Park Phase 1 were in occupancy in February 1999 and 16 mid-rise blocks of Fairview Garden Phase 1 were in occupancy in August 1999. In addition, a total of other 13 high-rise blocks and 70 mid-rise blocks in Gallopade Park Phases 2 and 3, Fairview Garden Phase 2, Huajing New City Phases 6A and 6B, Grandview Place and Regal Court have already attained top-out stage. The Group completed construction floor areas of 134,000 sq. m. during the period under review and the areas under construction amounted to 881,000 sq. m., which are expected to be available for occupancy in the second half of 1999 or in the year 2000. In terms of floor areas under development, the Group has also maintained itself as one of the largest property developers in Guangzhou City."
Looking ahead, Mr. Tse said, "1999 will be a year of opportunities co-existing with challenges. The welfare housing policy will be replaced by monetary subsidy scheme after 1999. Institutional purchase of properties is anticipated to increase in the latter half of 1999 in order to meet the deadline. In addition, with the government's policies in regard to land supply, the successive reductions in interest rate and the proactive mortgage policies, the prospect of Guangzhou property market remains promising.
"The Group's landbank is strategically and predominantly located in the popular and fastest growing areas in Guangzhou City. Amongst its total landbank of approximately 2,400,000 sq. m. attributable gross floor area, 73% and 24% are located at Tianhe District and Haizhu District respectively. The remaining 3% are located in other districts.
Mr. Tse concluded, "In the future, government's policies in regard to land supply are expected to better regulate the property market. The Group will continue to enlarge its market share by providing more middle-priced products and accelerate the project progresses. We are currently carrying out negotiation to replenish its landbank with quality sites. With a valuable and sizeable landbank, established reputation in the Guangzhou property market, together with its focused and effective marketing strategies, the Group should be able to strengthen its dominant position and achieved satisfactory returns for its shareholders."
Hopson Development Holdings Limited is one of the leading property development and investment companies in Guangzhou City, an affluent city in the PRC. The Group is renowned for its large-scale and quality residential projects in Guangzhou's fast-growing districts - Tianhe and Haizhu. The Group has a quality property portfolio comprising eleven development projects and a landbank with an aggregate attributable gross floor area of approximately 2,400,000 sq. m.. The Company was listed on The Stock Exchange of Hong Kong Limited on May 27, 1998.
For further information, please contact:
Mr. Stones Tse
Hopson Development Holdings Limited
C/O Occasions Corporate & Financial Communications Limited
Tel: 2801 5333 Fax: 2801 5323
Occasions Corporate & Financial Communications Limited
Tel: 2801 5333 Fax: 2801 5323
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