Full Wang may swing into the black: chairman

BRICKS AND MORTAR::Following recent earnings, the firm could return to profit this year, with further projects planned to capitalize on an improving market next year

By Crystal Hsu  /  Staff reporter

Sat, Dec 22, 2012 - Page 13

Greater Taichung-based Full Wang International Development Co (富旺國際開發) said yesterday it may swing into profit this year after trimming land stock and downsizing its loss-making brokerage business.

The company expects to earn NT$249 million (US$8.57 million) in net income this year, attributable to divestment of three industrial plots of land in Taoyuan County and recognition of profits from new home projects in Hsinchu, chairman Lin Cheng-hsiung (林正雄) told an investors conference.

“The [estimated] figures translate into NT$1.6 earnings per share ” this year, reversing losses of NT$240 million last year, partly thanks to effective cost control, Lin said.

The company cut the number of brokerage outlets from more than 30 last year to six this quarter after a spate of unfavorable policy measures, notably the special sales levy, slowed home transaction voumes, Lin said.

For the first three quarters of the year, Full Wang posted NT$65.3 million in net profit with earnings per share (EPS) of NT$0.92 based on a paid-in capital of NT$1.57 billion, company data showed. While the company remains upbeat about the importance of sales channels, it now favors a conservative expansion approach and supports the government’s effort to cool the property market.

That means Full Wang will focus its attention on real-estate development and construction, two core businesses that have generated the bulk of the company’s profits since its establishment 22 years ago, Lin said.

The company undertakes both residential and industrial urban regeneration and property dealership projects, he said.

In 2010, Full Wang expanded into real estate brokerage, which has been a slowing factor on overall earnings as the government seeks to rein in increases in property prices.

With ample stock, more than 21,735 ping (71,725m2) of land acquired at a low cost, the company is poised to benefit from liquidity-driven increases in value in the next two to three years, Lin said.

Full Wang shares ended up 1.64 percent at NT$24.8 yesterday on the over-the-counter GRETAI Securities Market, rising 34.07 percent so far this year, according to stock exchange data.

The recent disposal of land plots may contribute NT$140 million in net income, raising EPS by NT$1.04, Lin said.

Looking ahead, Full Wang expects the new home market to rebound next year as tightened floor ratios could push up housing costs, making the company’s projects more attractive compared with other products since Full Wang has no intention of raising prices, Lin said.

The company plans to roll out NT$5 billion worth of new home projects in Hsinchu and Greater Taichung next year.