Highwealth Construction Corp (興富發) expects better earnings this year, as some presale projects are about to be completed, allowing it to realize profits.
The Taipei-based developer reported its optimistic outlook after selling NT$60 billion (US$2 billion) of presale and newly completed housing units last year, saying that its presale volume this year is expected to reach NT$40 billion to NT$50 billion.
Inventory digestion drove 20 percent of sales last year, while presale projects underpinned 80 percent, enabling Highwealth to post profits for the next two to three years, company founder Cheng Chin-tien (鄭欽天) said.
Last week, the company sold a 1,625.94 ping (5,375.02m2) plot of land in Taipei’s Nangang District (南港) to YeaShin International Development Co (亞昕), Shin Ruen Development Co (新潤興業) and Hiyes International Co (海悅國際開發) for NT$1.79 billion.
The firm decided to make a quick profit on the plot, rather than wait a few more years for it to become even more profitable, Highwealth spokesman Liao Chao-hsiung (廖昭雄) said, adding that major property developers are buying up plots in Nangang, as the Taipei City Government plans to build a business district there after finishing one in Xinyi District (信義).
Cheng said that he has told his employees to aim for NT$100 billion in sales this year, as the property market is expected to thrive amid a stable economy, a low-interest environment and ongoing capital repatriation.
For the whole of last year, revenue totaled NT$23.79 billion, while earnings per share stood at NT$2.06 in the first three quarters — a decline of more than 45 percent from 2018.
The property market has a labor shortage due to a rapidly growing demand for factories and office space as Taiwanese manufacturers return home from China to avoid US tariffs on China-made goods, Cheng said.
Highwealth plans to introduce new construction methods that increase the use of prefab building materials and a significant reduction in labor, Cheng added.
The company would also tap further into the hospitality and retail sectors, he said.
Over the next two to three years, Highwealth expects to open a department store in Kaohsiung, as well as launch hotels in Tainan and New Taipei City, Cheng said, adding that the Tainan hotel would have 120 guestrooms, while the hot spring resort hotel in New Taipei City would have 202 rooms.
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