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Public company info - Prosperity International Holdings (H.K.) Ltd. , 00803.HK

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Prosperity International Holdings (H.K.) Ltd., 00803.HK - Company Profile
Chairman Xie Qiangming
Share Issued (share) 1,344,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Steel
Corporate Profile Business Summary: The core business of the Group is the (i) trading of clinker, cement and other building materials; (ii) mining and processing of granite and selling of granite products; (iii) trading of iron ore and raw materials; (iv) investment of public port and other related facilities business in the PRC and (v) real estate investment and development. Performance for the year: For the Year, revenue decreased to approximately HK$1,950 million from approximately HK$2,331 million for the Previous Financial Year. The Group’s gross profit increased by 11 times to approximately HK$540.1 million for the Year from approximately HK$45.1 million for the Previous Financial Year. Loss attributable to the owners of the Company for the Year was approximately HK$370 million, compared with a net loss of approximately HK$1,829 million for the Previous Financial Year. Business Review China’s Property Market The Year was a challenging year, clouded with the PRC-U.S. trade frictions and the global economic slowdown. The GDP of China still recorded a growth of 6.1% year-on-year in 2019. As revealed in the statistics of the National Bureau of Statistics, during the calendar year 2019, the sales amount of commodity housing was RMB15,972.5 billion, representing a yearon-year growth of 6.5%. Under the general principle of “housing is for living in, not speculation” and “stabilising land prices, housing prices, and market expectations”, the China government has made a great efforts to maintain the growth of the real estate market and sustainable urban development steadily. However, the outbreak of COVID-19 slowed down the growth of property demand and deferred the purchase power of houses. In the short term, property sales would be under pressure because of the epidemic. Nevertheless, with the government policies supporting continuous development of the real estate industry, the property sales are believed to rebound and stabilise progressively. In the medium and long term, it is believed that the foundation for a stable and healthy growth of property market remains solid in China. Furthermore, as the China government uplifted the limit on household registration for cities with permanent resident population, the growth of population in those major third- and fourth-tier cities is believed to be strong. Given its growth potential, the property market in China is expected to become a strong growth driver of the Chinese economy in the future. Real Estate Investment and Development To raise fund for repayment of overdue debts, the Group continued sales efforts at its property projects and disposed of two investment properties and equity stakes in some property projects. Sales of residential units at property projects in Yancheng and Suzhou, Jiangsu province, the PRC and in Jakarta, Indonesia 1. Binhai County of Yancheng City, Jiangsu Province In Binhai County of Yancheng City, Jiangsu Province of the PRC, the Group is now developing residential and commercial properties in a project called One City, which is positioned as an urban complex in Binhai County’s central business district (“CBD”). One City is developed in two phases. As of 31 March 2020, most of the 11 blocks of apartment buildings, townhouses and the shopping spaces in the first phase of the project had been sold. All presold units of apartment buildings, townhouses and shopping spaces in phase one were delivered to the buyers. The second phase of One City will comprise residential properties of 11 blocks of apartment buildings and 32 townhouses as well as a shopping street. All the residential units in the apartment buildings, townhouses and retail spaces in the shopping street in the second phase had been presold. Specifically, the first eight blocks of apartment buildings and the townhouses were delivered to buyers during the Year. Of the residential units in the remaining three blocks of apartment buildings, 81% were already presold. Of the retail spaces in the shopping street, 20% were presold. 2. Suzhou City, Jiangsu Province In Xishan Island, Wuzhong District, Suzhou City, Jiangsu Province of the PRC, the Group, through a 55%-owned company called 蘇州市嘉欣房地產開發有限公司 (Suzhou Jiaxin Real Estate Development Company Limited*), is developing a deluxe property project called 復園 (“Fu Yuan”) in two phases, which comprises 51 villas and a deluxe hotel. As of 31 March 2020, several villas in the first phase of the project had been sold and delivered to the buyers. The second phase of the project is completed. The deluxe hotel is currently under construction and the interior decoration is in progress. 3. West Jakarta, Indonesia The Company, through an indirect wholly-owned subsidiary, holds an effective equity stake of 75% in an Indonesian incorporated company called PT. Tritama Barata Makmur, which owns a piece of land in the heart of the CBD of West Jakarta, Indonesia. The Group is building a condominium for residential and commercial uses on the site. Approximately 20% of the 208 residential units at the project were presold as at 31 March 2020. Disposal of two investment properties in Guangzhou 4. Guangzhou City, Guangdong Province, the PRC The Company had been holding a 55% equity interest in Oriental Landmark in Guangzhou City, Guangdong Province through its indirect wholly-owned subsidiary, Bliss Hero Investment Limited, but signed an agreement on 3 September 2019 to sell such equity interest in the property for approximately RMB547 million to its business partner who also holds an equity stake in the property. The move was in line with the Group’s strategy of increasing its liquidity to repay due and maturing debts. The transaction has yet to be completed. For details, please refer to the announcement of the Company dated 3 September 2019 and the circular of the Company dated 25 October 2019. In April 2019, the Company completed the disposal of certain units in its another investment property, Silver Bay Plaza in Guangzhou City, Guangdong Province, for a consideration of approximately RMB92.7 million (equivalent to approximately HK$108 million). The transaction allowed the Group to reduce its gearing and strengthen its financial position. For details, please refer to the announcement of the Company dated 12 November 2018. Disposal of equity stakes in some property projects in Jiangsu, Guangdong, Zhejiang, Henan and Yunnan Provinces, the PRC 5. Suqian City, Jiangsu Province On 10 May 2019, the Group through its indirect wholly-owned subsidiary 浙江昌興投資 有限公司 (Zhejiang Changxing Investment Co., Ltd.*, “Zhejiang Changxing”) sold a 21.72% equity stake in 宿遷勝達房地產開發有限公司 (Suqian Shengda Real Estate Development Co., Ltd.*, “Suqian Shengda”) to a creditor 浙江坤元經貿有限公司 (Zhejiang Kunyuan Economics Trading Co., Ltd.*, “Zhejiang Kunyuan”), thus decreasing its own equity stake in Suqian Shengda from 70% to 48.28%. Suqian Shengda owns a residential project called 江山一品 (“Imperial Land”), in which it has a land of an aggregate site area of approximately 45,214 sq.m. in Suqian City, Jiangsu Province, the PRC, with certain residential units, shopping spaces and car parking spaces within the land. The land has a site area of approximately 26,653 sq.m. for the development of the second phase of Imperial Land. The second phase of the project has a planned gross floor area (“GFA”) of approximately 140,000 sq.m., and will include 4 blocks of residential buildings, an apartment building, a commercial building and car parking spaces. The Group commenced the development of the second phase of the project in the Previous Financial Year. Two blocks of residential buildings were put up for presale in the fourth quarter of 2018 and another two blocks were put up for presale during the Year. Approximately 90% of the residential units in the four blocks of residential buildings were presold. 6. Xuyi County of Huaian City, Jiangsu Province In August 2018, the Group sold a 20% equity stake in 盱眙昌興置業有限公司 (Xuyi Changxing Property Co., Ltd.*, “Xuyi Changxing Property”) to a strategic investor, thus decreasing its own equity stake in the company to 50% from 70%. Xuyi Changxing Property owns two land lots in Xuyi County, Huaian City, Jiangsu Province, and plans to develop residential and commercial properties on them with a plot ratio of up to 2.5 and planned GFA of up to 250,000 sq.m. The project is called 盱眙昌興 一城, which will be comprised of 10 residential buildings. During the Year, the Group commenced the presale of two such residential buildings, and 62% of the flats in that two residential buildings were presold. 7. Runan County of Zhumadian City, Henan Province On 7 August 2019, the Group disposed of its remaining, effective 13% equity stake in 汝 南中得置業有限公司 (Runan Zhongde Properties Co., Ltd*, “Runan Zhongde”) for a consideration of approximately RMB1.495 million (equivalent to approximately HK$1.64 million) and thus no longer has any equity interests in that company. Earlier in August 2018, the Group introduced two strategic investors into Runan Zhongde, thus decreasing its effective equity stake in Runan Zhongde to 13% from 26%. Runan Zhongde plans to develop residential and commercial properties on two parcels of land of an aggregate site area of approximately 140 mu (equivalent to approximately 93,333 sq.m.) in Runan County, Zhumadian City, Henan Province of the PRC. 8. Dali City, Yunnan Province On 24 April 2019, the Group sold its 20% equity stake in 大理港興置業有限公司 (Dali Gangxing Property Company Ltd.*, “Dali Gangxing”) for a consideration of RMB24 million (equivalent to approximately HK$27.3 million). Dali Gangxing engages in property development and owns a residential site of 31,208.34 sq.m. in Heqing County, Dali City, Yunnan Province, the PRC. For details, please refer to the announcement of the Company dated 24 June 2019. On 31 October 2019, the Group sold its remaining 30% equity stake in Dali Gangxing for a consideration of approximately RMB45.3 million (equivalent to approximately HK$49.8 million). Upon the completion of the deal, the Group no longer holds any equity interests in Dali Gangxing. For details, please refer to the announcement of the Company dated 31 October 2019. 9. Dongguan City, Guangdong Province On 13 March 2018, the Company sold its equity interests in a redevelopment project in Dongguan City, Guangdong Province to 東莞巿萬科房地產有限公司 (Dongguan Vanke Real Estate Company Limited*, “Dongguan Vanke”) and Hybest (BVI) Company Limited through disposals of its entire equity interests of the subsidiaries, Honwill Limited (“Honwill”) and 東莞市敬培實業有限公司 (Donggguan Honwill Limited*, “Dongguan Honwill”) for a consideration of approximately RMB830 million (equivalent to approximately HK$946 million). Up to the date of this results announcement, the transaction has not been completed but the Group has already received the installments of approximately RMB415 million (equivalent to approximately HK$497 million). Out of the consideration of RMB830 million (equivalent to approximately HK$946 million), in which RMB581 million (equivalent to approximately HK$662 million) is attributable to the Group in proportion to its equity stake upon the completion of the transaction. For details, please refer to the announcement of the Company dated 13 March 2018 and the circular of the Company dated 24 May 2018. On 24 March 2020, the Company, through its indirect wholly-owned subsidiary, entered into a sale and purchase agreement pursuant to which the Company conditionally agreed to sell the entire interest of issued share capital of a target subsidiary, Greater Sino Investments Limited (“GSI”, the holding company of Honwill and Dongguan Honwill), at consideration of approximately HK$335 million. The transaction has not been completed. For details, please refer to the announcement of the Company dated 24 March 2020. 10. Hangzhou City, Zhejiang Province On 23 March 2020, the Company, through its indirect wholly-owned subsidiary entered into a sale and purchase agreement to dispose certain properties in Hangzhou City, at a consideration in the aggregate sum of approximately RMB17 million (equivalent to approximately HK$18.9 million). The transaction was completed on 10 April 2020. The disposal represented a good opportunity for the Group to realise the properties’ value at a reasonable price, particularly in view of the adverse impact of COVID-19 on the property market sentiment. The net proceeds was utilised for the repayment of an outstanding loan, thereby reducing the Group’s liabilities and interest expenses. For details, please refer to the announcement of the Company dated 23 March 2020. Prospects: Raising capital to repay the enormous amount of outstanding debts will remain the Group’s first priority. The Group has already disposed of its equity stakes in certain businesses, properties or property development projects to relief the financial pressure and will continue with its sales efforts at some of such ongoing projects. In its property business, the Group will step up its sales efforts at the property projects in Yancheng and Suzhou, Jiangsu provinces, the PRC. As to its iron ore mining and processing business in Malaysia, the Group will consider resuming the business when the iron ore price stabilises at a high enough level for it to be profitable and when the Group has restored its financial health. The Group is also exploring other means of increasing liquidity to meet its financial obligations. For instance, the Group is attempting to approach prospective investors who may help it conduct shareholding restructuring and recapitalisation. The Group will continue to work hard to revive itself.

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