Sinyi Realty Inc (信義房屋), the nation’s only listed broker, saw its profit slump 20 percent year-on-year to NT$252 million (US$7.79 million) last quarter as unfavorable tax policies chilled existing home transactions, senior officials said yesterday.
However, the Taipei-based company expects revenues to pick up moving forward now that the property tax has settled and the central bank partially eased credit controls, injecting a modest dose of confidence into the market.
“The [sequential] increase in profit margin is sustainable in coming quarters, as the market has showed signs of stabilization,” Sinyi chief financial officer James Chen (陳建志) told investors’.
The second-quarter income translated into a gross profit margin of 27.3 percent, compared with 21.3 percent three months earlier, due to a low season in the first quarter and operation improvement from overseas units, Chen said.
The results translated into earnings of NT$0.38 per share.
Operations in Japan generated 4 percent of total revenues in the first half, compared with 2 percent a year earlier, while contributions from offices in China increased from 5 percent to 8 percent, Chen said.
The trend may continue for the rest of the year, thanks to looser credit controls in China and cheap currency in Japan, Chen said.
Chen said a series of tightening measures have driven local property funds to overseas markets, especially Japan, due to geographic closeness and trading safety.
Sinyi has no intention of setting up offices in Malaysia, Cambodia or Thailand in the foreseeable future, because it feels more comfortable doing business in familiar markets, Chen said.
The central bank’s move on Thursday, while symbolic, sent a positive message to the market and may help facilitate transactions for newly completed and luxury homes, Sinyi head researcher Stanley Su (蘇啟榮) said.
The monetary policymaker removed Taoyuan and parts of New Taipei City from a watch list and raised the loan-to-value ratio from 50 percent to 60 percent for luxury and third-home owners.
“The 10 percent difference will surely boost buying interest,” Su said.
With 435 offices nationwide, Sinyi commanded a market share of 7.7 percent as of June, up from 7.1 percent in the preceding quarter, company data showed.
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