Sunday, April 18, 2021
 
Columnist
Martin Hennecke
 
WAH HA REALTY
HKEx Stock Code : 00278 
 
Corporate Profile
The principal activities are investment holding, property development, investment and management in Hong Kong.

Business Review - For the year ended March 31, 2013

Property Development, Investment and Management

During the year under review, the Rental Business of the Group and its associated companies performed well. As reported earlier in the Interim Report, a previously vacant investment property of the Group was rented out at a satisfactory rate, the annual rental revenue improved by HK$0.5 million. As for the Rental Business of the associated companies, improvements were seen in the rental rates for new or renewed tenancies. The aggregate contributions of the Rental Business of the Group and its associated companies to the after-tax profit were HK$1.7 million higher than that of last year.

During the year under review, there were several disposals of the Group's and its associated companies' properties. First, the Group had disposed of its interest in two car parking spaces in Kwun Tong and the share of after-tax profit was HK$1.1 million. Second, an associated company had disposed of a shop in Wanchai and the Group's share of the after-tax profit was HK$7.7 million. Third, another associated company had disposed of a unit in Fanling and the Group's share of the after-tax profit was HK$1.0 million. The corresponding loss reported last year was HK$2.7 million.

Subsequent to the year end and up to the date of this report, the Group had disposed of its interest in four units in Tuen Mun and the share of the estimated after-tax profit was HK$2.7 million. Further, the Group had entered into an agreement to dispose of a unit in Fanling for an estimated after-tax profit of HK$2.9 million. Moreover, an associated company had disposed of three units in Fanling and the Group's share of the estimated after-tax profit was HK$3.1 million.

Apart from the aforesaid, the Group did not acquire or dispose of any property during the year under review and up to the date of this report.
For the year under review, although the operating environment of the Group's Property Management Business was tough, the profitability of this business was comparable to that of last year. Recently, the level of minimum wage was increased and greater pressure in operation is foreseen.

/b>Investments

During the year under review, the Group did not acquire or dispose of any listed investment. The Group recorded a fair value gain of HK$0.4 million from its investment portfolio, probably due to the improving sentiment.

The bank deposit rates were stabilized after a short period of going up last year. For the year under review, the increase in interest income was HK$0.6 million whereas last year's corresponding increase was HK$2.8 million.

Business Outlook - For the year ended March 31, 2013

In the United States, not long after the implementation of the third round of quantitative easing measures, there were noises that the Federal Reserve should consider to trim down the scale of the measures. Some even opined that withdrawal of the quantitative easing measures were essential in order to contain the recovered economy in a controllable scope. The Federal Reserve had indeed decided to discuss the issue in the next few meetings. The investment market interpreted it as having a time table for modification of the expansionary monetary policy. The result of this speculation was the worry of reduction of liquidity. The world securities markets reacted negatively to this probable outcome. In the Eurozone, the sovereignty debt crisis seemed to have been eased with the pledge of European Central Bank for an unlimited purchase of bonds. China had undoubtedly faced a slower pace in economic development. The Central Government tackled it positively by stimulating the domestic market and pursuing urbanization.

For the year under review, the local economy was still stable. The year-on-year GDP growth, after a short period of rapid growth of 7.3% in the 4th Quarter 2012, slowed down to 4.1% in the 1st Quarter 2013. A similar trend was observed in the total exports. The year-on-year increase in total exports for March 2013 was 11.2% which may be the result of low figure base for the Lunar New Year being in February. However, in April 2013, the increase dropped to 9.3%. Nonetheless, the Consumer Price Index was relatively stable and a year-on-year growth of 4.0% was reported for April 2013. The seasonally adjusted unemployment rate was 3.5% in the latest quarter, indicating an almost full employment position. All these together with the financially healthy Government illustrate that we are in a much better position than other counterparts in the world. But still, the Hong Kong Government was wary of the buoyant property market, especially the residential property market. Different administrative measures have been introduced to manage the housing demand of the general public. Following the implementation of the Special Stamp Duty in 2011, enhancement of the Special Stamp Duty and introduction of Buyer's Stamp Duty and Double Stamp Duty were effected in six months time and cast uncertainties on the property market. Immediate observation was the significant reduction in transaction volume with little price adjustment.

To cope with the ever changing uncertainties no matter imposed by the global economy or local elements, we should act prudently and maintain adequate resources to tackle any unforeseeable circumstances. We shall leverage on our virtually debt-free position so as to deliver stable returns to our shareholders.

Source: Wah Ha Realty (00278) Annual Results Announcement
Chairman Cheung Kee Wee Issued Capital (shares) 121M
Par Value HKD 0.65 Market Capitalisation (HKD) 696M
 
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