Mon, Sep 23, 2019 - Page 15 News List

Chia Hsin to focus on hospitality sector

CEMENT SWITCH:The firm’s Hotel Collective in Okinawa is expected to contribute to sales next year, and it is also planning to develop a 373-room resort in the prefecture

By Kwan Shin-han  /  Staff reporter

Chia Hsin Cement Corp (CHC, 嘉新水泥) expects its hospitality business to grow steadily next year, as it has been shifting its focus from making cement to developing and managing hotels in the past two years.

The company’s new hotel in Okinawa is to begin trial operations in January, while it plans to open its second postpartum care center in Taipei City’s Songshan District (松山) next quarter, CHC chief executive officer Elizabeth Wang (王立心) told an investors’ meeting in Taipei on Thursday.

The firm aims to raise hospitality business sales from 3 percent of total sales in the first half of the year to about 50 percent in 2023, she said.

In the first half, cement contributed 52 percent of total sales, while logistics and warehouse services made up 30 percent, with real estate accounting for 15 percent, company data showed.

With the cement business likely to remain stable this year, overall sales this year are expected be flat from last year, Wang said.

Chia Hsin has stopped making cement, and instead purchases and sells cement from Taiwan Cement Corp (台灣水泥), she said.

As the number of tourists to Okinawa is growing stably and hotel occupancy rates remain at about 80 percent, Chia Hsin’s Hotel Collective, which has 260 rooms, is expected to contribute to sales next year and break even in six years, she said.

The firm said it plans to jointly develop a resort with 373 rooms in Okinawa’s Tomigusuku with InterContinental Hotels Group PLC.

It is expected to be completed in 2023.

In the first half of the year, net income surged 82.49 percent year-on-year to NT$728.35 million (US$23.51 million), while earnings per share (EPS) increased from NT$0.62 to NT$1.13, mainly thanks to disposal gains of 130.75 million yuan (US$18.44 million) from Jiangsu Union Cement (江蘇聯合水泥) in the second quarter, the company said.

Excluding asset disposal gains, EPS would be NT$0.19, it said.

First-half revenue declined 11.04 percent year-on-year to NT$890.41 million, as the company’s cargo services at the Port of Taipei shrank.

The company is expected to receive dividend income of NT$959 million from investing in Taiwan Cement this quarter, and would receive disposal gains of 70 million yuan from its subsidiary Shanghai Jiahuan Concrete Co Ltd (上海嘉環) late this year at the earliest, it said.

Shares in Chia Hsin rose 3.41 percent to NT$18.2 on Friday in Taipei trading. They have advanced 33.82 percent so far this year.

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