Friday, March 5, 2021
 
Columnist
Martin Hennecke
 
HOPEFLUENT
HKEx Stock Code : 00733 
 
Corporate Profile
Principally engaged in the provision of real estate agency services and estate management services in the PRC.

Business Review - For the year ended December 31, 2012

Primary Property Real Estate Agency and Consultancy Services

During the year under review, the Group handled approximately 111,000 primary property transactions involving a total gross floor area of about 12 million square meters with a total transaction value of about HK$126.0 billion, an increase of around 33% (2011: HK$94.5 billion). The Group was agent for more than 550 projects and about 502 of them contributed turnover to the Group for the year under review amounting to approximately HK$1,095 million, a 13% rise when compared to HK$966 million in 2011.

Currently, Hopefluent occupies the leading position in the primary property real estate agency market in China, and its total transaction value and number also far exceeded those of other peers. The business in Guangzhou generated a substantial profit to the Group in 2012, accounting for around 38% of the total turnover of primary property segments. After years of efforts to expand its business coverage, the Group has established 25 offices in second and third-tier cities such as Foshan, Dongguan, Hefei, Nanjing and Zhengzhou, successfully bringing its business to more than 100 third and fourth-tier cities. This strategic direction has enabled it to tap areas with strong potential including Zhongshan, Zhuhai, Shaoguan, Huainan, Xiangtan, Xinyang, Nanchang and Changshu. By capturing the opportunities available in these locations it has expanded its market share. During the year, specific offices including Foshan, Shenzhen, Hefei, Zhengzhou and Guizhou have registered outstanding performances. As such, turnover from districts outside Guangzhou contributed approximately 62% of the primary property real estate agency business.

During the year under review, its professional service, comprehensive sales strategy and outstanding sales track record have reinforced the trust and recognition of large developers who have worked closely with the Group for years. The number of exclusive agency projects continued to pick up, occupying around 95% of our total projects on hand. Of these Sun Hung Kai Properties, R&F Properties and KWG Property co-developed-Riviera, New World Central Park-view, Poly Zephyr City in Huadu, Evergrande Royal Scenic Bay in Hefei, Vanke King Metropolis, Evergrande City in Guiyang and Pudong Star River in Shanghai have delivered good sales performances.

Another strength of the Group is its comprehensive initial project consultancy services to property developers spanning the entire planning process from professional advice on location and market positioning to marketing strategies and sales. During the year under review, the Group provided initial project planning services for more than 30 development projects in many cities across China.

Secondary Property Real Estate Agency and Mortgage Referral Services

In 2012, the austerity measures launched by the Central Government have had a great impact on overall secondary property market. Major measures such as the introduction of property purchase restrictions and tighter mortgages for second property have discouraged property investors, shrinking the overall sales volume. Riding on extensive industry experience and shrewd market insight, the Group is able to quickly adjust its operating strategies for the secondary property real estate agency business. While reducing staff and number of branches in line with market conditions, it has also shifted its business focus to new property projects and commercial property sales such as office and shopping space and leasing services to increase commission income and expand its customer resources. Currently, there are around 300 branches, of which, approximately 240 branches are located in Guangzhou which is the Group''s focus city, while the remaining 60 are located in Foshan, Dongguan, Shanghai and Hangzhou. Due to the efforts the Group has proactively spent on setting up a business unit to engage in the sales of some primary property projects, business performance of the secondary property real estate agency business was maintained at a similar standard to that of last year.

The Group handled approximately 39,000 secondary property transactions during the year (2011: 51,200 transactions). Turnover from the secondary property real estate agency service business increased 3% from HK$511 million in 2011 to approximately HK$527 million. Transactions from Guangzhou contributed around 82% of the total turnover from this segment while 18% came from of outside Guangzhou.

In addition to providing property agency services, the Group also offers other property related value-added services to customers including mortgage referral service, property valuation and property auction. These services not only provide an additional income stream to the Group, but also help to strengthen its brand image and create synergies with its current businesses.

Property Management Service

The Group has provided property management services during the year under review to more than 120 residential, office and commercial projects in Guangzhou, Shanghai, Tianjin and Wuhan involving more than 150,000 units with a total gross floor area covering more than 20 million square meters. These services have generated both a stable income and a large customer base for the Group, which would also support its future expansion.

Business Outlook - For the year ended December 31, 2012

In early March of 2013, the Central Government sets the economic and social development targets for this year. These targets include pursuing annual GDP growth at about 7.5% and an annual consumer price index increase of 3.5%, as well as proposing the urbanization of villages as a major economic growth driver, which establish the continuous development space for the real estate industry. Also, along with the strong demand from first-time buyers and those who want to improve living standard, the Group is optimistic about the prospects of the property market in China and will continue to foster its business development steadily.

The primary property real estate agency business remains as the Group's development focus in 2013. Led by an experienced management team, the Group has strategically implemented sales plans in cities with growth potential in order to achieve sustainable business growth. At the same time, the Group has established close partnerships with renowned developers including Vanke, Evergrande, Poly, Gemdale, Citic, Kingold, China Merchants Property Development, China Resources Property, R&F Properties, Agile Property, KWG Property, Star River, Sun Hung Kai Properties and New World China Land. As part of this collaboration, it has become the designated property sales agent of new property projects launched by these developers in 2013. Projects on hand would also continue its growth momentum. The Group is also striving to secure more agency projects in different regions to consolidate its leadership position in China's property market.

Despite the ˇ§Five National Regulations on the Property Marketˇ¨ announced by the Central Government in early March of 2013, its aim is to discourage the soaring property price and speculative property investment. Notice should also be given to the Central Government's impetus to the urbanization plan, bringing out the messages of improving citizen's livelihood, increasing the housing demand and developing a healthy property market. The Group will maintain its primary property real estate service business in all cities in the PRC, aiming to form a solid foundation for the Group, thereby driving prudent business development and maintaining stable growth.

Moving forward, the Group is continuously striving to provide its customers with superior property real estate agency and consulting services, as well as actively expanding its real estate-related value-added services businesses. As for the domestic property market, the management believes that market demand for housing will remain strong. Together with the sales strategy of major developers to ˇ§sell more properties at a lower priceˇ¨ and the Central Government's sustainable economic development policies, the Group is confident of generating a satisfactory return for shareholders through a pragmatic business approach, proactive and timely strategy adjustment and highest quality of service.

Source: Hopefluent Gp (00733) Annual Results Announcement
Chairman Fu Wai Chung Issued Capital (shares) 486M
Par Value HKD 0.01 Market Capitalisation (HKD) 1,313M
 
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