Property developer Hua Yang Bhd is looking forward to another year of impressive sales and earnings growth, says group chief financial officer May Chan.
The group, which is known for developing residential properties in the affordable segment, will also be celebrating the 10th anniversary of its listing on Bursa Malaysia this November.
It plans to launch projects with a combined gross development value (GDV) of RM815mil for its current financial year ending March 31, 2013 (FY2013).
Chan says this will more than double the RM400mil GDV of properties launched by Hua Yang in its previous financial year.
The bulk of Hua Yang's sales in FY2013 will be from its Klang Valley developments, namely Phase 4 of One South in Seri Kembangan (GDV of RM200mil) as well as new leasehold service apartments in Shah Alam (GDV of RM175mil) and Desa Pandan (GDV of RM160mil).
The Desa Pandan development of two blocks of serviced apartments and two levels of retail units is on 1.55 acres in Kuala Lumpur, and is slated for a January 2013 launch.
“There will be around 400 units, sized from 540 to 1,000 sq ft. We have not firmed up prices yet. But interest is strong, with 2,000 registrations to date,” says Chan.
Meanwhile, the Shah Alam service apartments is due to be launched in October and is priced at more than RM300 per sq ft.
Another significant sales contributor in FY2013 will be new launches with a GDV of RM105mil in the group's Bandar Universiti Seri Iskandar township in Perak.
“We are also looking to acquire more land for future growth. It will be another busy year for us,” Chan tells StarBizWeek.
Presently, the group has an undeveloped land bank of 766 acres which has an estimated GDV of RM2.4bil across the Klang Valley, Johor, Perak and Negri Sembilan.
Chan says the group is looking to build on the momentum of FY2012's record-breaking success, where Hua Yang posted a 111% year-on-year increase in net profit to RM53mil while revenue rose 62% to RM306.4mil on the back of strong sales growth which was largely driven by its ongoing One South development.
One South
One South is Hua Yang's biggest project in the Klang Valley, with a GDV of RM920mil, consisting of retail units and offices, serviced apartments, soho (small office/home office) units and office towers on 16.7 acres in Seri Kembangan.
About 70% or RM365.6mil of Hua Yang's sales of RM520mil in the previous financial year (FY2012) came from One South.
As of end-June, phase one which consists of retail and office units is 90% sold.
Phase 2 and 3 which consist of 795 units of serviced apartments is 100% sold.
This year, the strong sales momentum for One South has continued with the April launch of phase 4 or Hua Yang's first ever soho development, namely Flexis@One South.
Two types of layouts are offered, consisting of single level units with built-ups of 475 and 628 sq ft, as well as duplex (split level) units ranging from 1,106 to 1,271 sq ft.
A typical soho unit will come with air conditioning, instant water heater, kitchen cabinets with sinks, gas hobs, audio intercom handset, Astro-ready cables and fibre optic points for high-speed Internet access.
Duplex upper floor units will have laminated timber flooring as well as a washing machine, fridge and a wardrobe.
“That way, residents need to purchase very little prior to moving in, as we have sorted out most of the fixtures,” says Chan.
Flexis@One South will have facilities on the 21st floor that ranges from a sky infinity lap pool, sky wading pool, sky pool bar, jacuzzi, floating sun deck, floating cabana, sauna, reflexology path, sky garden, barbecue deck, children's playground, rock climbing wall, meditation deck, yoga deck, Zen Garden, gazebo, study room, games room, boxing room, kitchenette, sky dining, sky lounge, sky bar to a sky fitness centre.
“Flexis@OneSouth will be the first in Seri Kembangan to have a 40m sky infinity lap pool, with a pool bar.”
Meanwhile, Chan says the first block of 266 units in Flexis@One South is fully booked, with prices starting from RM250,000 per unit.
The second block of 158 units in Flexis@One South was recently opened for bookings, and is selling at higher prices of around RM480 to RM500 per sq ft.
According to Chan, Flexis@One South is priced reasonably compared with other new high-rise developments in Seri Kembangan. Chan also points out that selling prices were in line with market demand and conditions.
“Phase 2 serviced apartments were sold at RM320 per sq ft in May last year. Subsequently, Phase 3 units were sold at RM370 per sq ft in July 2011.”
Chan says Hua Yang had bought the land for One South at RM55 per sq ft in December 2008.
“Recently, we looked at land around One South and prices have reached more than RM200 per sq ft.”
The final phase 5 and 6 of One South is likely to consist of a last block of serviced apartments and two blocks of office towers. “Initially, there plans for a hotel. But we are still exploring and looking at the best options for the final phases.”
One South is due to be completed by 2018.
Future growth
When asked whether Hua Yang is overly dependent on One South to drive sales growth, Chan says, “Not at all.”
She points out that One South has less than 25% of the combined GDV of RM815mil in new launches of projects for FY2013.
“This year, the Shah Alam and Desa Pandan developments will also drive our sales.”
As at March 31, 2012, Hua Yang's total unbilled sales from five ongoing developments stood at RM488mil.
The five ongoing developments are One South, Bandar Universiti Seri Iskandar township in Perak, Taman Pulai Indah in Johor, Senawang Link in Negri Sembilan, and Symphony Heights in Selayang, Selangor.
Developed since 2002, the 838-acre Bandar Universiti Seri Iskandar (BUSI) is Hua Yang's biggest township project.
“BUSI's GDV is estimated at RM1.2bil and it is slated to have about 6,000 residential and commercial units. So far, we have completed about 2,000 units. so, we still have eight to 10 more years to go for BUSI.”
Meanwhile, less than 20% of the 477-acre Taman Pulai Indah remains to be developed while the Senawang Link light industrial development has a GDV of RM45mil.
The Symphony Heights serviced apartments will be completed this year.
“All these, coupled with new phases and developments that will come on-stream in FY2013, gives the group a good earnings visibility for the next two years,” says Chan.
She is also confident about seeing continued positive response from buyers in the affordable market segment, such as first-time home owners, newly-weds, young adults and small families.
Chan says the group had been on an upward growth momentum since 2008, and is on track to achieve revenue of RM500mil by FY2014 and RM800mil by FY2018.
Concerning dividend payouts, Chan says the group usually pays out 25% of net profit as dividends.
For FY2012, the group has proposed a gross first and final dividend of 15 sen per share, which translates to a net dividend payout ratio of 30% of net earnings.
“This is the highest ever dividend payout.”
By The Star
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