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Public company info - LET Group Holdings Limited , 01383.HK
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LET Group Holdings Limited, 01383.HK - Company Profile
Chairman Chau Cheok Wa
Share Issued (share) 6,668,000,000
Par Currency Hong Kong Dollar
Par Value 0.1
Industry Travel & Tourism
Corporate Profile Business Summary: The Group is principally engaged in the development of residential and commercial properties as well as leasing of commercial properties in Guangdong, Liaoning and Anhui Provinces, the PRC, and providing hotel and integrated resort management and consultancy service and travel agency service. Performance for the year: The Group recorded a loss for the year attributable to owners of the Company of RMB1,484.3 million in 2019 that represents a slight increase as compared to the loss for the year attributable to owners of the Company of RMB1,458.5 million in 2018. Revenue for the year was approximately RMB611.8 million, decreased by approximately RMB180.8 million when compared to approximately RMB792.6 million for last year. Business Review During the year ended 31 December 2019, the Group continued to engage in (i) property development in the PRC; (ii) property leasing in the PRC, (iii) provision of hotel and integrated resort general consultancy services in Vietnam and Cambodia; (iv) provision of travel related products and services; and (v) other segment. Property development As at 31 December 2019, the Group had two property development projects in the PRC, namely Le Paysage in Shenzhen, Guangdong Province and the Landale located at Chaohu, Anhui Province. Le Paysage Le Paysage is in the boarder land of Luohu district and Longgang district of Shenzhen, on the hillside of the east side of Qingping expressway and Fengyi mountain tunnel. Le Paysage consists of premier villas, residential units and retail shops with total saleable GFA of approximately 96,953 m2 . The Group has commenced to deliver Le Paysage to buyers since the third quarter of 2014 and has already sold approximately 86% of the total saleable area of Le Paysage as at 31 December 2019. Landale The Landale is currently suspended due to the change in policy regarding the rules of scenic area in the PRC. During the year ended 31 December 2019, the Group received a notice from Chaohu Government that in accordance with the relevant laws and rules of scenic area in the PRC, the Chaohu Government intends to reclaim the land use rights in respect of the Landale project of total land area of approximately 183.54 Chinese Mu (equivalent to approximately 122,360 m2) owned by the Group’s subsidiary with appropriate compensation to be paid to the Group’s subsidiary, which is yet to be determined. Details of which are disclosed in the announcement of the Company dated 12 April 2019. Apart from the PRC, the Group has been exploring opportunities in other Asian countries such as Vietnam, Korea, Japan, the Philippines and Myanmar. Property leasing The property leasing business is principally engaged in the leasing of a portion of Hong Long Plaza in Shenzhen, namely Gang Long City Shopping Centre. The shopping centre has a leasable area of 64,397 square meters and the occupancy rate for the year ended 31 December 2019 was 60% (2018: 67%). Hotel and integrated resort general consultancy services The Group commenced the provision in hotel and integrated general consultancy services in 2017 and several agreements have been signed with integrated resorts in Vietnam and Cambodia. As the integrated resorts are still under construction and the construction of the Hoiana Project will be completed in Q2 of 2020 onwards, the Group believes the performance of this segment will improve in the coming years. Travel related products and services The Group commenced the provision of hotel accommodation products, transportation tickets and travel related products in Macau since 2016. In addition to the traditional point-of-sale channels, the Group launched a mobile application to facilitate the sale of travel related products. According to the information published by the Statistics and Census Service of the Macau SAR Government, the number of visitor arrivals exceeded 39.4 million in 2019, up by 10.1% year-on-year. The average occupancy rate of hotels and guesthouses for the year ended 31 December 2019 decreased by 0.3% year-on-year to 90.8%, with 5-star hotels at 92.2%, a decrease of 0.2% year-on-year. The average length of stay of guests held steady year-on-year at 1.5 nights. Since 2018, the Group has extended its travel products to Vietnam and Turkey, The Group aim to enrich The Group’s products to cover more Asian countries in the near future. Other revenue The other revenue recognised in 2019 was attributable to the operations of FOPM Group from the date of the SunTrust Acquisition up to 10 December 2019. On 10 December 2019, upon the completion of FOPM Shares Subscription, SunTrust’s equity interest in FOPM was diluted from 100% to 24.27%. Accordingly, FOPM Group ceased to be subsidiaries of the Group as from 10 December 2019 and FOPM became an associate of the Group, no more other revenue was recognised in the Group’s consolidated financial statements since then. Investment in integrated resorts and hotel projects (i) The Hoiana Project On 28 August 2018, the Group completed the acquisition of the entire equity interest and shareholder’s loan owed by Star Admiral. Star Admiral held approximately 34% indirect equity interest in the Hoiana Project. The Hoiana Project is expected to comprise of seven phases to be developed over a span of thirteen years on a site of approximately 985.5 hectares. Phase 1 is currently under development and is expected to be completed in the second quarter of 2020 and it will include more than 1,000 hotel rooms, a casino with 140 gaming tables and over 300 slot machines, as well as a golf course. (ii) The TIGRE DE CRISTAL As at 31 December 2019, the Group held approximately 24.74% equity interest of Summit Ascent. Summit Ascent held 60% of the issued share capital of an integrated resort named “TIGRE DE CRISTAL” in Russian Far East. Phase 1 of TIGRE DE CRISTAL has commenced operation since 2015 and is comprised of gaming area with daily average of 22 VIP gaming tables, 27 mass gaming tables, 336 slot machines and a 121 rooms 5-star hotel with F&B and retail outlets. Phase 2 of TIGRE DE CRISTAL is under reviewed and is finalizing conceptual designs. It is targeting an opening of in 2022. This new integrated resort is expected to double the VIP and mass gaming tables, slots, and have at least twice the lodging capacity of the first property. The plans include four restaurants and bars, additional retail offerings, and an indoor beach club and spa. (iii) Hotel development project in Japan As at 31 December 2019, the Group also owns 51% of the issued share capital of MSRD, which held a plot of land with a total site area 108,799 sq.m. located on Miyako Island, Okinawa, Japan. Subject to the final development plan to be approved by the Group, MSRD intends to build 40 villas with pool and a hotel of more than 100 rooms on the land. As at 31 December 2019, the hotel project is currently under planning stage. (iv) Co-Development of westside City Project at Entertainment City Pursuant to the co-development agreement entered into between SunTrust and westside City Resorts World Inc. on 28 October 2019 (the “Co-Development Agreement”) with the principal terms set out in the Co-Development Agreement, an operations and management/services agreement will be entered into for the appointment of SunTrust as the sole and exclusive operator and manager to operate and manage the main hotel casino (“O&M Agreement”). The main hotel casino comprises of (a) the 5-star hotel with at least four hundred (400) rooms, the standard room size of which shall not be less than 34 sq.m.; (b) casino establishment with approximately four hundred (400) gaming tables and one thousand two hundred (1,200) slot machines for both mass and VIP markets; and (c) Nine hundred sixty (960) car parking slots for the 5-star hotel and casino establishment erected or to be erected at the westside City Project at the Entertainment City, Manila, the Philippines (“Main Hotel Casino”). The investment in SunTrust marked the first step towards establishing the Group’s footprint in the casino and entertainment market of the Philippines and allowing the Group to tap into this growing market as well as providing synergies to the overall tourism-related business of the Group in the South East Asia region. Prospects: The Group recorded a loss attributable to owners of the Company of RMB1,484.3 million for the year ended 31 December 2019 (for the year ended 31 December 2018: RMB1,458.5 million). In 2019, the Group reported a slight increase of loss attributable to owners of the Company by 1.8% as compared to 2018. This was primarily resulted from the decrease in loss of change in fair value of derivative financial instruments offset against the recognition of the loss on deemed disposal of subsidiaries, the recognition of impairment on interest in an associate, the recognition of loss on deemed partial disposal of equity interest in an associate, the increase in loss of change in fair value of investment properties, and the increase in share of loss of a joint venture. During the year, the Group recorded a decline in total revenue from RMB792.6 million to RMB611.8 million when compared to 2018, representing a 22.8% decrease. Gross profit also decreased by 57.8% to RMB99.9 million. Thesewere mainly attributable to the decrease in revenue from sale of properties of the Group. Outside the Greater China, in addition to the entering several technical service and casino management agreements in Vietnam and Cambodia in 2018, The Group are also delighted to report that the Group has successfully acquired a joint venture which primarily holds approximately 34% equity interest in the Hoiana Project in 2018. Phase 1 of the Hoiana Project is currently under development and was originally expected to be completed in the second quarter of 2020. It will include more than 1,000 hotel rooms, a casino with 140 gaming tables and over 300 slot machines as well as a 18-hole golf course. Due to the coronavirus pandemic in the first quarter of 2020, construction and pre-opening progress of the Hoiana Project is undoubtedly affected. Hence, the grand opening of the Hoiana Project is scheduled to happen in 2021 while a soft opening will be held in summer 2020. In May 2020, the Ministry of Finance of the Socialist Republic of Vietnam has granted the Certification for the Eligibility for Casino Business (the “Casino Operating License”) to HASD, subject to the compliance of the relevant laws and regulations, the term of the Casino Operating License (and subsequent extension or renewal) under which HASD is allowed to conduct casino business activities for a period until 10 December 2080. For business segment of travel related products and services, improving infrastructure such as the Hong Kong-Zhuhai-Macau Bridge, the Light Rail Transit and improved connectivity with Chinese cities set as the foundation for a further surge in demand for travel & hotels within the Greater Bay Area. Although short-term uncertainties such as the USChina trade war, RMB fluctuations and the COVID-19 pandemic, the Group remains confident towards the improved visitation outlook in the Greater Bay Area. In 2019, the Group continually invested in fast growing countries in Asia. The GDP in Vietnam grew by 6.5% year-on-year to US$261.6 billion in 2019. Vietnam has delivered extraordinary visitation growth in 2019, visitation numbers increased by 16.2% year-on-year to 18 million visitors. In particular, the area of Danang and Hoi An served as a hub for international tourism as quality tourism products such as five-star hotel rooms, long pristine beaches, UNESCO World Heritage sites and newly built tourist attractions, are now made available. On the other hand, GDP in the Philippines grew by 5.7% year-on-year to US$356.8 billion in 2019. The overall gross gaming revenue in the Philippines grew by 15.4% year-on-year to PHP216.4 billion (US$4.3 billion) in 2019, making the Philippines one of the best performing gaming jurisdictions in Asia. As at 31 December 2019, the Group held approximately 24.74% equity interest of Summit Ascent which held 60% of the issued share capital of an integrated resort named “TIGRE DE CRISTAL” in Russian Far East, the Group is currently working on the renovation of TIGRE DE CRISTAL Phase 1 and the majority of the project enhancements are expected to be completed in the first half of 2020. In addition, the Phase 2 of TIGRE DE CRISTAL is being designed and is targeting an opening in 2022. For thewestside City Project, piling works are being conducted on the construction site and The Group are now working on the architectural design for the Main Hotel Casino, located at the Entertainment City, Manila, the Philippines. Development is expected to commence in the second quarter of 2020 after handover of the construction site under the CoDevelopment Agreement and the Main Hotel Casino is expected to commence operation prior to 2023. The Group will continue to diversify its businesses to tourism-related business in Asian countries and grasp opportunities on the provision for hotel and integrated resort general consultancy services. During 2019, the Group signed a non-legal binding memorandum of understanding with Paradise Co., Ltd. (“Paradise”) on a possible co-operation on Paradise’s casino in Busan, Korea, and The Group believe the cooperation can enable both parties to create a synergy and develop The Group’s own strengths, resources and expertise. The Group aims to build an integrated tourism and entertainment related platform with equity investments in integrated resorts as well as a tourism-related service provider to integrated resorts within the Asian region. The Group’s business strategies will continue in tourism-related and entertainment business in Asian countries. The Group is dedicated to bring greater value to the Shareholders in the long run.

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