Sinyi Realty Inc (信義房屋), the nation’s only listed broker, aims to press ahead with expansion plans in Taiwan and China this year, unfazed by economic uncertainties and a new taxation policy that cut into its earnings in the second quarter, company executives said yesterday.
Sinyi’s net profit during the April-to-June period was NT$311.56 million (US$10.66 million), down 36.21 percent from a year earlier and 4.56 percent from the first quarter, as a special sales levy, generally known as the luxury tax, chilled transactions, Sinyi chief financial officer Sandy Chou (周素香) told an investors conference.
Revenues from home sales were NT$2.02 billion in the second quarter, falling 12.3 percent year-on-year and 6.26 percent from three months earlier, although Sinyi retained its leadership position in the nation’s fragmented market, the company’s data showed.
“We will go ahead and increase our outlets in Taiwan to 400 by the end of this year from the current 353,” Chou said. “The expansion eroded profit margin a bit in the first half, but may boost overall earnings.”
Gross margin stood at 29.26 percent in the second quarter, down slightly from 29.71 percent in the preceding quarter, company statistics indicated.
In the first six months, net profits amounted to NT$638 million, or earnings of NT$1.45 per share, down 21.2 percent from NT$1.84 a year earlier, Chou said.
Sinyi’s investments in China remained in the red, but the company will continue to strengthen its presence across the Taiwan Strait, increasing its number of Chinese outlets to 750 this year, from about 560, Chou said.
“We hope to facilitate the pace of profitability, but cannot speculate on the timing due to China’s ongoing effort to cool the property market,” Chou said.
Domestically, the luxury tax remains a drag on the sector, but its impact appeared to have subsided as evidenced by the shorter turnaround time for property transactions, Sinyi head researcher Stanley Su (蘇啟榮) said.
It took 28 days to close a deal last month, compared with 45 days in the lead up to the June 1 implementation of the luxury tax, Su said.
The levy, applied to houses resold within two years of purchase and ranging from 10 percent to 15 percent of the transaction price, has failed to trigger a fall in real-estate prices, Su said.
“The market is quite stable, if sluggish,” Su said, adding that the trend may sustain this quarter and beyond if the nation’s political parties persist with unfavorable rhetoric about the housing market, such as the proposed disclosure measures requiring real-estate brokers to file transaction data based on real trading prices, which are much higher than publicly assessed values for tax purposes.
Shares of Sinyi rose 1.28 percent to close at NT$43.55 yesterday, outperforming the TAIEX’s 0.82 percent’s gain.
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