Friday, March 29, 2024
 
Columnist
Martin Hennecke
 
KWG PROPERTY
HKEx Stock Code : 01813 
 
Corporate Profile
Principal activities in the PRC are: property development; property investment; hotel operation; and provision of property management services.

Business Review - For the year ended December 31, 2012

During 2012, the Group launched several new projects in Shanghai, including Shanghai Emerald, Amazing Bay, Shanghai Sapphire and Shanghai Apex, through which the Group was able to establish footprint in Shanghai. This demonstrates its strong ability to execute projects in new cities beyond Guangzhou. New projects such as Chengdu Sky Ville, Pearl Coast in Hainan and Suzhou Emerald were introduced in the second half of the year, bringing the number of sales contributing projects to 19. The Group responded to property market regulation by making additional efforts in exploring its existing regions and cities, enhancing product research and adopting timely adjustments to sales strategies and product types to accommodate market changes and customers' demands, with the aim of pursuing prudent development in cities in which it operates in.

To address changes in property market, the Group made timely adjustments to its project development strategies and schedules. While focusing on desired product types, the Group aimed at maintaining sufficient saleable resources and faster cash collection at controlled costs, in shortened development cycle and with higher efficiency and quality.

The Group accelerated sales by launching commercial projects that are not subject to the Home Purchase Restriction and mortgage restrictions. During the year, the Group made major marketing efforts to launch various products, such as The Riviera, a high-end serviced apartment project located in Pearl River New Town, Guangzhou, L7 in Guangzhou featuring modern designs, as well as Shanghai Sapphire located in the heart of Jiading, Shanghai. At the same time, the Group continued to launch commercial products within its existing projects in Guangzhou, Suzhou, Chengdu and Beijing, such as serviced apartments and retail shops catering to various consumers.

The Group sought to meet the needs of different consumer groups by introducing products of varieties. Shanghai Emerald, a brand new project located at the centre of Jiading, Shanghai was officially launched in January 2012, featuring residences with unit area of 90 sq.m and below. The project has been well received by the market since its debut owing to its convenient location, ample facilities and surrounding transportation links. The outperforming sales of Shanghai Emerald have not only enhanced the Group's reputation and market position in Shanghai, but also serves as a solid guide and reference for the Group's strategic planning and integrated marketing. At the end of September 2012, Chengdu Sky Ville was launched around the National Day holidays, the first batch of which comprised exquisitely fitted flats of approximately 120-200 sq.m. The property won wide acclaim upon launch for its unique design and excellent facilities.

The Group continued to monitor changes in government policies for the land market during the year with a focus on cost and location, as it sought to seize the right opportunity to add premium sites to its land bank. In the second half of the year, the Group replenished its land bank with the acquisitions of 5 premium and appropriately sized land parcels in Guangzhou, Shanghai and Suzhou at reasonable prices within our land budget. As at 31 December 2012, the Group holds a land bank with an aggregate GFA of approximately 9.2 million sq.m., which should be sufficient for future development for 5¡V6 years.

The Group has been taking advantage of its diversified financing channels to secure new capital for future growth. In March 2012, the Group successfully issued senior notes in the amount of US$400 million. Furthermore, the Group obtained additional loans from domestic banks with which it maintained close working relationships. In the meantime, we also worked closely with overseas banks on the latest developments and changes in the financing market in order to secure loans at more reasonable interest rates.

Investment Properties and Hotels

For the year ended 31 December 2012, turnover of the Group from its investments in office premises and leasing of retail properties amounted to approximately RMB143.3 million (2011: approximately RMB138.6 million).

1) Hotels

Sheraton Guangzhou Huadu Resort, our second hotel in Guangzhou officially commenced operation in 2011. Sheraton Guangzhou Huadu Resort, together with Four Points by Sheraton Guangzhou, Dongpu opened in 2009, featuring cozy and relaxing environments complemented by exquisite services and premium dining, have helped expanding customer base for the Group.

Our W Hotel will officially commence operation in the first half of 2013. W Hotel is a brand name for modern, luxury, and fashion under Starwood Hotels & Resorts Worldwide, Inc., and the Group's W Hotel is the first W Hotel in the Mainland China.

2) Investment properties completed and available for lease

IFP is one of our major investment properties with a prestigious location in the Pearl River New Town, the CBD of Guangzhou. IFP is very popular with high-end customers, such as large financial institutions and offices of diplomatic institutions, who are attracted by the convenient transportation, as well as its high-quality premise and excellent property management. As at 31 December 2012, the occupancy rate of IFP stood at above 98.3%. The tenants mainly included numerous domestic and foreign banks, Guangzhou offices of multinational corporations and diplomatic establishments.

Business Outlook - For the year ended December 31, 2012

The Group plans to launch a number of brand new projects in 2013. Meanwhile, the Group will continue to step up with the launch of new phases in existing projects. The Group will continue to improve its hotel management, upgrade services provided by its hotels and the management standards of its investment properties. By offering a broader range of products and dedicated services, the Group looks to enhance its integrated corporate strengths as it strives for sound and stable corporate development in earnest devotion.

Source: KWG Property (01813) Annual Results Announcement
Chairman Kong Jian Min Issued Capital (shares) 2,893M
Par Value HKD 0.1 Market Capitalisation (HKD) 13,164M
 
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