Highwealth Construction Co (興富發建設), Taiwan’s leading land developer, expects earnings this year to be flat compared with last year, after shareholders approved plans to cut the company’s capital by 20 percent.
Highwealth chairman Cheng Chin-tien (鄭欽天) yesterday had to call a vote to push through the capital reduction plan that caused the company’s shares to tumble recently and infuriated individual shareholders.
“I respect different views about the restructuring plan,” Cheng told the company’s annual general meeting. “Time will be the final judge on the issue.”
The planned decrease, the first since Highwealth was listed in 1999, scheduled to take place in the fourth quarter, would shrink the company’s capital by NT$1.496 billion (US$49.88 million) to NT$5.826 billion.
The proceeds are to be returned to shareholders, Cheng said.
Shareholders also reluctantly approved a plan to distribute a NT$3 per share cash dividend from last year’s net income of NT$6.398 billion, or earnings per share of NT$9.19.
That meant a 50.81 percent decline from a cash dividend of NT$6.1 per share the previous year, company data showed.
Highwealth aims to keep earnings steady this year as the company plans to start a total of NT$70 billion of new construction projects nationwide, Cheng said.
The developer voiced cautious optimism about industry outlook for the rest of the year.
“The housing market is unlikely to turn into a bubble in the next two to three years as real-estate properties have proved a reliable safe haven when risky assets tumble amid market volatility,” Cheng said.
The steep rise in labor and construction costs further weakens the chance of a price correction, he said.
Houses in Greater Kaohsiung have the greatest potential for price hikes, while office buildings in Greater Taichung generate the highest returns, compared with similar products elsewhere in Taiwan, Cheng said.