China South City sees further sales pressure
China South City, a major Chinese wholesale trade centre developer, said on Monday it expected a challenging second half after reporting 42 per cent decline in net profit in the first half of fiscal 2015/16 due to weakening manufacturing purchasing demand.
As of September 30, the company’s first half contracted sales dropped 44.5 per cent to HK$ 3.8 billion. Net profit fell to HK$756 million, compared to HK$1.3 billion the same period last year.
While the core profit deducting after-tax government subsidies was only around HK$400 million, according to Stephen Fung, Chief Financial Officer of China South City.
“Our sales will still face challenges in the second half, as we don’t see any improvement in macro economic environment,” Fung told a media briefing on Monday.
To cope with the headwinds, the company said they would slow down capital expense and strengthen recurring income from rental, property management services, logistics & warehousing services, outlet operations and e-commerce.
It expects recurring income to hit up to about HK$2 billion by the end of fiscal 2016/17. The recurring income was about HK$600 million in the first half of 2015.