Shimao set to cash in on its tourism assets

PUBLISHED : Wednesday, 23 March, 2011, 12:00am
UPDATED : Wednesday, 23 March, 2011, 12:00am

Shimao Property Holdings is considering spinning off its tourism-related property arm, including hotels, theme parks and golf courses, after announcing a 41 per cent rise in underlying full-year profit last year.

'We are doing preparation work now, but [there's] no timeframe for the listing at the moment,' said vice-chairman and executive director Jason Hui Sai-tan.

Currently, the firm owns three hotels, with 1,994 rooms, and three others - Hilton Shimao Nanjing, Holiday Inn Shimao Shaoxing and Hilton Shimao Tianjin - will be completed this year.

Its tourism property arm has a land bank of 3.63 million square metres in 20 cities.

The company abandoned plans to list its mainland hotel operations on the Hong Kong stock exchange in 2009 after the market slumped following the global financial crisis.

Chairman Hui Wing-mau said the group was building senior citizens' homes, cinemas and three theme parks to diversify its source of income.

'Instead of positioning itself as a pure residential property developer, Shimao is committed to becoming an integrated real estate group by expanding its business to ecological housing, commercial property, tourism property and properties from hi-tech industry players across the [Taiwan] Strait,' he said.

Shimao has an undisclosed stake in Straits Construction Investment (Holdings), a US$10 billion fund formed by Shimao, Taiwan's Farglory Group and former Sun Hung Kai Properties chairman Walter Kwok Ping-sheung, to explore large-scale property development on the mainland and in Taiwan.

Shimao reported underlying profit rose 41 per cent to 4 billion yuan (HK$4.7 billion) for the year to December. It will pay a final dividend of 25 HK cents per share, up 8.7 per cent from a year earlier. Turnover rose 28 per cent to 21.79 billion yuan last year.

As of December, it had disposal funding of about 22.7 billion yuan, including cash on hand of 13.7 billion yuan and undrawn bank loans of 9 billion yuan. Including revaluation gains on investment properties, it said net profit jumped 52 per cent to 5.5 billion yuan.

It is targeting contract sales of 36 billion yuan this year, up 20 per cent from last year.

Jason Hui said he expected about half of the sales to come from commercial properties such as serviced apartments, which would not be affected by the central government's moves to cool the market.