Wednesday, February 19, 2020
 
Columnist
Martin Hennecke
 
DYNAMIC HOLD
HKEx Stock Code : 00029 
 
Corporate Profile
Principal activities are property investment and development.

Business Review - For the year ended June 30, 2012

In the year under review, the Group carried on its operating segments of property rental and property sales in the mainland China. The segment of property rental in Beijing and Shanghai remained the key contributor of turnover and results of the Group. On the other hand, the segment of property sales continued to descend due to limited number of unsold units held by the Group for sale in the year.

The investment properties of the Group, comprising the quality offices in Pudong in Shanghai and the well-established shopping mall together with carparks in Chaoyang District in Beijing, generated an aggregate rental income of HK$80,031,000 (2011: HK$71,714,000), which attributed to 85% (2011: 72%) of the total turnover of the Group in the year and increased by 12% as compared with that of last year. In line with improved rental, the fair value of investment properties appreciated in the sum of HK$59,156,000 (2011: HK$34,176,000) in the year. As such, the segment results of property rental recorded a profit of HK$118,055,000 (2011: HK$81,856,000) representing a surge of 44% as compared with those of the previous year.

The Group accounted for sales proceeds of residential units in the sum of HK$14,185,000 (2011: HK$28,382,000), which attributed to 15% (2011: 28%) of the total turnover of the Group in the year and markedly dropped by 50% as compared with that of last year. And the segment results of property sales recorded a profit of HK$10,722,000 (2011: HK$19,197,000). The fall in sales and results was due to the fact that there were few residential units held by the Group for sale associated with retardant sentiment of residential market in Beijing amidst official ongoing demand-suppression policies imposed by the authorities in the year.

In Beijing, the retail market witnessed steady growth in both rents and occupancy rates underpinned by retailers' active expansion and set-up in the year. The ¡§Uptown Mall¡¨ of the Group in Chaoyang District attained full level of occupancy, with improved rental in the sum of HK$26,496,000 (2011: HK$25,634,000). In Shanghai, leasing demand and net takeup remained buoyant in the office market in Pudong, thereby impelling full occupancy rate and better rental income from the quality offices of the Group known as ¡§Eton Place¡¨ primely located at Little Lujiazui in Pudong. In the year under review, the aggregated rental income from the Group's investment properties in Shanghai amounted to HK$53,535,000 (2011: HK$46,080,000), showing a rise of 16% as compared with that of the previous year.

Moreover, capital value of the investment properties of the Group in Beijing and Shanghai appreciated in the sum of HK$12,273,000 (2011: HK$25,368,000) and HK$46,883,000 (2011: HK$8,808,000) respectively.

In respect of the jointly controlled entity of the Company known as Shenzhen Zhen Wah Harbour Enterprises Ltd. (¡§Zhen Wah¡¨), which is entitled to the land use right of a piece of land located in Tung Kok Tau, Nanshan District, Shenzhen (the ¡§Land¡¨), the surrounding infrastructure of the Land including Shenzhen Metro and conjunction of Wang Hai Road, Hai Bin Road and Ke Yuan Road have been concluded with the relevant authorities but still subject to compromise of compensation between the relevant authorities and Zhen Wah. Meanwhile, the Group and the Chinese partner of Zhen Wah have been continuing to actively and jointly negotiate with the municipal governmental authorities in relation to official land rezoning with an aim to optimise use of the Land and ancillary facilities, to increase gross developable area and saleable floor area mainly in high-rise residential area and to procure favorable revised land premium for additional gross developable area of the Land.

Business Outlook - For the year ended June 30, 2012

Despite ongoing uncertainties over the global economy outlook and the forecast of a slowdown in overall economic growth in China, it is anticipated that economic growth in China will remain solid along with official stimulative policies to spur positive economic and market sentiment, bolstering leasing demand and rental income of office and retail sectors.

In Beijing, leasing activities of retailers are forecasted to remain stable owing to retailers' eagerness to expand and capture more market share on the back of brisk domestic retail market. Meanwhile, the Group will continue to re-position its mall by upgrading tenant mix and brand portfolio for market niche with an aim to strengthen its competiveness for high occupancy rate and constant recurring revenue to the Group.

In Shanghai, although the slower growth in China economy may soften the demand of office space, given limited new office developments and the active momentum of office leasing of domestic financial and professional services firms in the prime location of Little Lujiazui, rental and occupancy rate are expected to remain steady. To procure high occupancy rate and steady recurring revenue, the Group will strive for retention and expansion of existing tenants upon lease renewals with competitive rental strategies.

In light of booming city development particularly the superb residential development in Nanshan District Shenzhen which is getting closer mix with Hong Kong, the Group will continuously endeavor to safeguard its best interests in Zhen Wah and to negotiate with the relevant government authorities in an attempt to enhance redevelopment plan and maximise asset value of Tung Kok Tau in alignment with the official rezoning, city planning and development of infrastructure in the region.

Source: Dynamic Holdings (00029) Annual Results Announcement
Chairman TAN Harry Chua Issued Capital (shares) 219M
Par Value HKD 1 Market Capitalisation (HKD) 511M
 
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