Underlying Profit Decreased by 22.4% to HK$52.4 Million;
Declared an Interim Dividend of 4.0 HK Cents per Share
HONG KONG – (ACN Newswire) – Grand Ming Group Holdings Limited (the “Company” and together with its subsidiaries, the “Group”, stock code: 1271.HK) today announces its interim results for the six months ended 30 September 2018 (“FH 2018/19”).
– Recorded revenue of HK$272 million, a decrease of 66.6%.
– Recorded underlying profit, exclusive of the effect of changes in fair value of investment properties, of HK$52.4 million, a decrease of 22.4%.
– Attained net profit for the period of HK$51.3 million, representing a decrease of 28.2% over last year.
– Declared interim dividend of 4.0 HK cents per share.
– Continues to sale by tender for its “Cristallo” project and commences the preparatory work for the pre-sale of the Tsing Yi Sai Shan Road project.
– Seek opportunities to expand land bank in Hong Kong.
Total revenue of the Group decreased 66.6% from HK$815.0 million for the six months ended 30 September March 2017 (“FH 2017/18”) to HK$272.0 million for FH 2018/19. The decrease in revenue was mainly attributable to drop in revenue derived from the building construction segment, offset partially by revenue contributed from the sale of one apartment of “Cristallo”.
For the FH 2018/19, the Group’s underlying profit, excluding the changes in fair value on investment properties, amounted to HK$52.4 million, representing a decrease of HK$15.1 million or 22.4% over that of HK$67.5 million in FH 2017/18. Underlying earnings per share was 7.4 HK cents (2017: 9.5 HK cents). While the Group’s net profit for the period was HK$51.3 million, inclusive of a decrease in fair value of investment properties of HK$1.1 million, representing a decrease of HK$20.1 million or 28.2% when compared with that of HK$71.4 million for FH 2017/18. Earnings per share was 7.2 HK cents (2017: 10.1 HK cents).
The Board proposed to declare interim dividend of 4.0 HK cents (2017: 4.0 HK cents) per share, payable on 12 December 2018 to shareholders whose names appear on the Company’s register of members on 28 November 2018.
Revenue derived from the construction division decreased by approximately 79.8% or HK$591.1 million, from approximately HK$740.6 million for the FH 2017/18 to approximately HK$149.5 million for the FH 2018/19. The decrease was mainly because the construction project at Kai Tak were substantially completed in the previous financial year, resulting in much lower percentage of revenue being certified during FH 2018/19.
The property leasing division continued to yield stable results. Revenue derived from the leasing of data centres (iTech Tower 1 and 2) slightly increased by approximately 3.5% or HK$2.5 million, from approximately HK$72.2 million for FH 2017/18 to approximately HK$74.7 million for FH 2018/19. The Group strives to enhance utilization and revenue contribution from the tenants in iTech Tower 2.
For the property development division, the site formation and foundation works of the Group’s first property development project at Sai Shan Road, Tsing Yi, New Territories continues to advance smoothly. The development will consist of two blocks of 30-storey residential buildings together with club-house facilities and car parks on a gross floor area of approximately 400,000 square feet.
The Group made a prompt and successful move to expand its property portfolio via the acquisition of the en-bloc residential property in October 2017. The property was named as “Cristallo” and received overwhelming market supports since its launch for sales by tender in April 2018. In the FH 2018/19, the Group completed the sale and delivery of one apartment and recorded revenue of approximately HK$43.0 million. The Group further entered five provisional sales and purchase agreements in respect of sales of five apartments for an aggregate value of approximately HK$187.5 million in October 2018 and the transactions are expected to be completed during the period from December 2020 to October 2021.
The “Cristallo” project is an en-bloc completed residential building located at No. 279 Prince Edward Road West, Kowloon, and offers 18 residential apartments with the size ranging from 1,300 to 2,700 square feet. The property is a newly completed luxurious low-density residential building located in the traditional luxury district of Kowloon.
Mr. Chan Hung Ming, Chairman and Executive Director of the Company said, “Following the delivery of the first revenue and profit contribution in our property development division from the sale of the first luxury apartment in “Cristallo”, I am thrilled to lead the Group to a milestone year. Even the continued interest rate hikes coupled with the US-China trade tariffs cast shadow over the global business landscape, we remain cautiously optimistic about the Hong Kong property market. We see the prolonged imbalance of supply and demand for private residential units in the market, in particular new luxury residential units in the traditional luxurious areas. Our “Cristallo” project makes a perfect fit for the market demand and therefore we expect it to bring satisfactory returns to the Group in the years ahead. On the other hand, we have commenced the preparatory work for the pre-sale of our Tsing Yi Sai Shan Road project. Eyeing on the continued record-breaking of the residential property price and the emerging economic volatility, we see the property market may enter into a consolidation period and it may present a perfect opportunity for us to expand our land bank. We will grow our landbank via opportunities available such as public tendering, joint ventures, property acquisitions including acquisition of en-bloc completed properties or properties with fully consolidated ownership. On the other hand, we will continue to create a balance leveraged property portfolio by our continuous effort to invest and upgrade our data centre infrastructure and act very cautiously in investing our third high-tier data centre locally or outside Hong Kong.”
In terms of the construction business, the Group maintains a prudent approach in bidding new construction projects and will act only when a reasonable profit margin is attained from the new project tender. The construction sector still concerns the Group for the escalated labour wages, the shortage of skilled labours, coupled with the margin squeeze for the new construction project due to the keen market competition.
About Grand Ming Group Holdings Limited (Stock code: 1271.HK)
The Group is principally engaged in the business of building construction, property leasing and property development. As a local wholesale co-location provider of high-tier data centres, the Group is one of the dedicated service provider in Hong Kong which owns and uses the entire building for leasing to customers for data centre use. Its clients include multinational data centre operator, telecommunications company and financial institutions. With more than 20 years of experience in the construction industry, the Group also provides building construction services as a main contractor, and is involved in residential property development projects with prominent local developers, as well as offering alteration, renovation and fitting-out services for existing buildings in Hong Kong. Furthermore, the Group owns a land in Sai Shan Road, Tsing Yi for the purpose of developing a residential project with gross floor area of 400,000 square feet, as well as an en-bloc residential building in Prince Edward Road West, Kowloon being named as “Cristallo”.
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