Socam warns of loss, pins hopes on luxury flats
Property developer Socam Development has warned shareholders it might report a first-half loss, and said it would embark on an aggressive sales programme over the next several months to help offset a slump in revenues.
The company, which filed a profit warning statement with the stock exchange on Friday, said it had secured just 20 per cent of its targeted sales so far.
The group is now pinning its hopes for improved second-half revenue figures on finding buyers for its 73 luxury serviced apartments in Shanghai being sold under the Four Seasons brand.
'We have registered a number of interested buyers even before the official launch,' Philip Wong Kun-to, Socam Development's chief executive, told a group of reporters invited to view the Four Seasons Place project, located on the Pudong.
Wong said Socam hoped to generate as much as three billion yuan (HK$3.67 billion) in sales revenue if all units were sold at asking prices ranging from about 130,000 to 140,000 yuan per square metre. Sized from 149 to 325 square metres, the units will sell for between 18 million and 42 million yuan each.
The project should be a major revenue contributor this year, Wong said. The company added that it had a supply of properties totalling a gross floor area of 200,000 square metres, worth a projected 7 billion yuan in revenue, that were on schedule and available for delivery in the second half. The projects are in Shanghai, Guangzhou, Beijing and Shenyang.
Socam acquired a 70 per cent stake in the hotel and serviced apartment portion of the 21st Century Tower on Pudong for 1.8 billion yuan in 2010. The hotel and the serviced apartments are on the 26th to 49th floors of the 21st Century Tower on the Pudong.
Four Seasons Hotel Pudong is due to open in August.
'We are becoming more active in marketing our projects in the second half in anticipation of the market improving,' said Wong. Socam was also in talks with two parties over acquiring its 45 per cent stake in its cement operation, Lafarge Shui On Cement.
'We hope to finalise the deal this year,' said Wong, who said the group had decided to end its investment in cement operations in order to focus on its property investment business.
Socam shares fell 0.87 per cent on Friday to close at HK$7.90.