Sinyi Realty Inc (信義房屋) yesterday said its second-quarter profit surged more than four times from the same period last year thanks to earnings generated from a housing project in Shanghai.
Net income stood at NT$1.18 billion (US$39.05 million) during the April-to-June period, an increase of 430 percent from the same period last year, as the real-estate broker recognized profits from the first batch of presale apartments in the most populous Chinese municipality.
“The growth momentum [in profitability] might extend through the year as Sinyi is to recognize profits from the second-phase development project,” the firm’s senior financial director Chris Chen (陳志桓) told an investors’ conference in Taipei.
Sinyi in 2012 acquired a 170,000 ping (561,984m2) plot of land in Shanghai’s Jiading area for NT$3.8 billion.
Ninety-two percent of the 566 first-phase development apartment units sold, generating a net income of NT$910 million in April and May, Chen said.
The company bought 37 units through a Chinese subsidiary for 153 million yuan (US$22.77 million) and plans to resell them at higher rates if Chinese authorities give the go-ahead, it said.
Housing prices in Shanghai continue to pick up, despite tightening measures to cool the property fever, Chen said.
Sinyi has sold 211 of the second phase’s 543 units at higher asking prices than the first batch, Chen said.
The profit margin was 26 percent for the first batch, Chen said, declining to comment on the ongoing project that is due to be delivered late next month.
Sinyi has expanded into real-estate development and home decoration to diversify its sources of income.
Property development in China last quarter generated 72 percent of its profits, while the brokerage business in Taiwan contributed only 23 percent, company data showed.
Sinyi is also looking to recognize profit from an upscale apartment building in Taipei’s Tianmu (天母) area in the final quarter of the year after having finished construction last month, Chen said.
“We have confidence we will find buyers as there are only 17 units and four of them sold during the presale stage,” Chen said.
Sinyi also plans to launch two phases of apartment presales in New Taipei City’s Banciao District (板橋) next year on land it acquired this year.
The company, which owns more than 1.1 million shares in E.Sun Financial Holding Co (玉山金控), said it would keep the stake as it generates an 8 percent yield, Chen said.
Sinyi, which said it would not shore up its shares, shed another 1.1 percent to close at NT$31.55 yesterday, bucking the TAIEX’s 0.35 percent rise, Chen said.
The company’s stock fell 1.87 percent this year, while the broader market rallied 13.54 percent, Taiwan Stock Exchange data showed.
“The share movements reflect conservative property sector views by investors,” Chen said. “Sinyi will show respect and concentrate to improve its operations.”
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