Sales have exceeded the annual target
As of the end of December last year, New World’s revenue was HKD 27.18 billion, an increase of 11.14% year-on-year, with the property development segment contributing HKD 5.139 billion. During this period, the group sold a total of 2,234 units in Hong Kong, with a contract sales amount of HKD 11.7 billion, achieving the annual sales target of HKD 10 billion. Executive Director and Co-CEO Zheng Zhigang indicated that as of mid-February, the group’s contract sales for Hong Kong properties this fiscal year have reached HKD 13.6 billion, but there are currently no plans to adjust the sales target for this fiscal year.
Zheng Zhigang pointed out that the group plans to launch six residential projects in Hong Kong, involving approximately 3,000 units. Earlier, the group also submitted applications for pre-sale consent for the "THE AUSTIN" site and the Tin Hau residential project. It is expected that the revenue from the "Double Cove" and "The Riverpark" projects sold in the first half of the fiscal year will be recognized in the second half of this year.
Hong Kong property prices are unlikely to drop significantly, estimated to decline by only 10%
Zheng Jiachun stated that developing real estate in Hong Kong is becoming increasingly challenging: "On one hand, interest rates are still at low levels and will not change significantly in the short term, coupled with high construction costs, developers face rising costs... and foreign capital coming to Hong Kong to invest in land makes it difficult for land prices to drop." Therefore, he believes that under the influence of these factors, property prices are unlikely to fall in the next one to two years, estimating a decline of only 10%.
However, he believes that the cooling measures have a stabilizing effect on the property market, so he does not expect the government to cancel these measures for the time being. He suggests that the government consider using the related tax revenue to assist citizens in home ownership, such as accelerating the construction of public housing and subsidized housing to help with property purchases.
No large-scale expansion overseas
Despite facing shrinking profits, Zheng Jiachun stated that developing real estate in Hong Kong remains the group’s core business, and there will be no large-scale land development overseas. The group will also continue to sell non-core assets. New World sold approximately 20% of its stake in CSL in the first half of the fiscal year.
Additionally, regarding the progress of New World’s hotel spin-off listing, Zheng Jiachun stated that they will continue to explore platforms to manage the hotel business. In response to rumors about the improvement of New World’s founder Zheng Yutong’s health and his return home for recuperation, Zheng Jiachun simply replied, "Thank you, thank you."
