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Public company info - Star Group Company Limited , 01560.HK

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Star Group Company Limited, 01560.HK - Company Profile
Chairman Chan Man Fai Joe
Share Issued (share) 641,000,000
Par Currency Hong Kong Dollar
Par Value 0.01
Industry Property Development
Corporate Profile Business Summary: The Group is principally engaged in property development, property investment, provision of property management services and provision of finance. Performance for the year: Revenue and profit attributable to owners of the Company for the year ended 31 December 2019 approximately 120.0 million (2018: approximately HK$671.7 million) and approximately HK$5.7 million (2018: approximately HK$191.8 million) respectively. The basic and diluted earnings per share for the year ended 31 December 2019 was approximately HK0.9 cents and HK0.9 cents, respectively, as compared to basic and diluted earnings per share of approximately HK30.6 cents and HK30.6 cents, respectively, for the corresponding period last year. BUSINESS REVIEW The Company is principally engaged in property development and property investment for sale, rental or capital appreciation, provision of property management services, and provision of finance. The Group’s revenue for the year ended 31 December 2019 amounted to approximately HK$120.0 million (2018: approximately HK$671.7 million), which represented a decrease of approximately HK$551.7 million compared with last year. Profit attributable to owners of the Company for the year ended 31 December 2019 was approximately HK$5.7 million (2018: approximately HK$191.8 million), which represented a decrease of approximately HK$186.1 million from last year. Both the decrease in revenue and decrease in gross profit were mainly due to decrease of the completion and delivery of sold units during the year. The basic and diluted earnings per share for the period was approximately HK0.9 cents and HK0.9 cents, respectively, as compared to basic and diluted earnings per share of approximately HK30.6 cents and HK30.6 cents, respectively. The review of the individual business segment of the Group is set out below. PROPERTY DEVELOPMENT Revenue recognised in this business segment during the year amounted to approximately HK$109.8 million (2018: approximately HK$667.2 million). As at 31 December 2019, the Group had three completed projects, namely, (a) The Galaxy; (b) The Star and (c) The Rainbow; and six projects under development, namely, (d) the CWK Project; (e) Yuen Long site; (f) Kwun Tong site; (g) Tack Lee Project; (h) Seongsu Project and (i) Sausage Project. In the year of 2019, the Group has taken a more conservative approach to monitor the market condition and concentrate on development of the existing projects. Going forwards, the Group will continue to pay ongoing attention to the latest property market in Hong Kong and worldwide to ensure the Group would be able to capture the best development opportunities. PROPERTY INVESTMENT As at 31 December 2019, the total carrying value of the Group’s portfolio of investment properties, amounted to approximately HK$52.0 million (31 December 2018: approximately HK$13.5 million), which comprised of car parking spaces located in Hong Kong with a total carrying value of approximately HK$5.0 million (31 December 2018: approximately HK$13.5 million); and 2 units of an industrial building, which was newly acquired in October 2019, located in Hong Kong with a total carrying value of approximately HK$47.0 million (31 December 2018: nil). Revenue recognised in this business segment during the year amounted to approximately HK$0.5 million (2018: approximately HK$0.7 million), representing a decrease of approximately HK$0.2 million over last year. The decrease in gross rental income was mainly due to sales of car parking spaces during the period. In addition to the 2 newly acquired industrial building units in October 2019 as disclosed above, the Group would continue to increase the proportion of investment property for rental and capital appreciation to generate more stable rental income. PROVISION OF PROPERTY MANAGEMENT SERVICES The Group used to provide the property management services for our three completed projects, The Galaxy, The Star and The Rainbow, by appointing Jones Lang Lasalle Management Services Ltd. as the management agent. In order to enhance the services quality and better serve the end users, the Group took back the property management services from Jones Lang Lasalle Management Services Ltd. in the third quarter of 2019. Revenue recognised in this business segment during the year amounted to approximately HK$2.7 million (31 December 2018: approximately HK$1.1 million), the Group expects this segment of business to be expanded as the increase of its upcoming completed projects and provision of services to other property owners or developers. PROVISION OF FINANCE The Group is operating in this business segment to provide credit facilities to individuals and corporations clients for its own development projects. Revenue generated from this business segment during this year amounted to approximately HK$7.0 million (2018: HK$2.7 million), representing an increase of approximately HK$4.3 million over the corresponding period last year. The increase in revenue was mainly attributable to providing credit facilities for the completed projects, The Star and The Rainbow. The Group expects this business segment will continue to growth healthily under the continuous tightening of mortgage lending policy in Hong Kong and as the increase of our completed projects. Prospects: In the second half of 2019, US-Sino trade war together with the social actions and unrest took a hit on the business environment and tourism in Hong Kong. As such, the year-end residential price indicated by Centa-City Index had dropped by about 6.8% from the record high in 2019. However, the Hong Kong residential market is resilient fueled by the deal made between America and China coming down to the trade dispute so that about 4% price increase in the residential market is recorded in the whole year of 2019. Nevertheless, the outbreak of Noval Coronavirus (COVID-19) in China and its spreading is further dampening the weakened retail market and economy of Hong Kong, so does the Hong Kong property market, in particular the retail sector. The gloom and mourning in food and beverage as well as tourist industry are widespread. After all, we are not pessimistic about the property market in the following reasons. First off, according to World Health Organization, this Coronavirus is the same family as SARSCoV which struck the economy of Hong Kong after its outbreak in 2003. However, the SARSCoV becomes a very rare disease if not none after the settlement of the epidemic in 2003. As such, we believe the epidemic of this Coronavirus is short term in nature and will be controlled or even ended in couples of months. Secondly, as this epidemic is getting the economy of China burnt, we believe the Government of China will take several measures in both monetary and fiscal policies such as injecting capital into the financial market and increasing government expenditures to help the economy to bounce back from this crisis. Along the way, the pain in Hong Kong arising from this epidemic will be mitigated. Thirdly, the American together with other western countries have a high likelihood to maintain a relatively loosen monetary policies and keep the interest rate low or even lower in the middle of the epidemic happened in China. In turn, the property market in Hong Kong will be benefited and supported in some way.

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