Taipei Times (TT): The operation of freeway service zones in Taiwan and China is a major revenue source for Nan Ren Hu Leisure Amusement Co Ltd (南仁湖育樂). What will be the company’s future development in this sector?
Lisa Cheng (Cheng, 鄭宜芳): From northern to southern Taiwan, Nan Ren Hu currently operates seven expressway service zones, including the service zone in Greater Tainan’s Kuanmiao District (關廟), of which the company will take over management in November.
As for the business in China, the company is continuing the pace of adjustment to shut down various loss-making freeway service stations.
Through the operation of expressway service zones, the company provides catering and guest rooms, as well as other services, like wireless network card leasing, financial online searching, agent distribution of tickets, telephone cards and facsimile services, which leads to steady performance in both sales and profitability for the company.
However, due to the fact that the National Freeway Bureau is not scheduled to launch any auctions to operate highway rest areas within six years, the company has been increasing the pace to arrange other business opportunities.
TT: Could you tell us more about these new business opportunities in Taiwan?
Cheng: The company has made a good start operating commercial areas in a hospital since the first half of this year, providing catering services and sales of medical goods.
The company took over operations of the commercial area in the E-da Hospital (義大醫院) in Greater Kaohsiung earlier this year, with its monthly sales reaching more than NT$20 million (US$665,535) in May, breaking the record-high level of sales in this commercial area.
The company is set to start operating the commercial area of a new branch of E-da Hospital later this quarter, and continue looking for chances with other hospitals.
Also, Nan Ren Hu has already signed a contract with a famous Taiwanese electronics firm to operate the small-scale commercial area in its building at the Southern Taiwan Science Park (STSP) in the near future.
TT: Other than operation of highway service zones, could you share more about Nan Ren Hu’s development in the leisure and accommodation sectors?
Cheng: Kentington Resort, in Manjhou Township (滿州) of Pingtung County, was the earliest business run by Nan Ren Wu.
Launched in 1994, the resort includes more than 300 cabins as guest rooms, with various entertainment facilities, catering services and travel information services.
Kentington Resort generated sales of NT$170 million for Nan Ren Hu last year, with the company targeting the operations of the resort to return to the black this year.
With the company’s efforts to raise the proportion of independent visitors at the resort to 70 percent of total customers, Kentington Resort has seen its profitability in the first six months of this year triple from the same period last year.
Ho Hsiao-kuang (何曉光): In addition, the company’s investment in Hi-Scene World Enterprise Co Ltd (海景世界) has been an important sales source on the back of its operation in the National Museum of Marine Biology and Aquarium, with the subsidiary to post annual revenue of NT$700 million last year.
Nan Ren Hu has also started to develop in the construction sector, following the purchase of land in Greater Kaohsiung two years ago.
The land development project for residential use has 53 households and is expected to launch sales in the first quarter of 2016, with the project’s total selling price between NT$480 million and NT$500 million.
TT: Nan Ren Hu has seen its consolidated sales in the first half of this year total NT$785.13 million, up 13.26 percent from the same period last year. Which business sector will be the company’s major sales momentum in the second half?
Ho: Eyeing the strong seasonal demand during the summer vacation, sales at both Kentington Resort and Hi-Scene World may be major drivers for the company’s sales in the second half of this year.
To boost tourists’ interests in visiting Kentington Resort, the company has acquired a plot of land at the resort to hold an international hot air balloon festival this and next month.
Meanwhile, the number of visitors assigned to join in the “Night At The Museum Sleepovers” event at the National Museum of Marine Biology and Aquarium is rising, an indication the sleepover program will help raise company sales.
TT: Nan Ren Hu saw net profit last year total NT$92.06 million, or NT$0.44 per share, with shareholders agreeing to the company’s plan to distribute a cash dividend of NT$0.3 per share. Will the company maintain the same level of dividend in the future?
Ho: As the company’s profitability increases in the future, Nan Ren Hu will raise the amount of its dividend.
Despite Nan Ren Hu posting net losses of NT$690,000 in the first three months of the year, the company aims to post a net profit this year.
The company’s board of directors has also launched a plan to repurchase 15 million shares, or 7.04 percent of its share capital, at a price of between NT$12 and NT$20 per share, to raise the company’s earnings per share and protect shareholders’ rights.
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