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Hong Kong company reporting season

HNA’s Hong Kong-listed unit reports net annual loss of HK$21.9m on revenue of HK$182.54m

Company continues to invest in property and golf courses, and other areas including warehousing, bulk commodity trading, and logistics finance

PUBLISHED : Tuesday, 21 March, 2017, 12:39pm
UPDATED : Thursday, 23 March, 2017, 10:35am

HNA Holding Group, the Hong Kong-listed unit of the Chinese conglomerate and owner of Hainan Airlines HNA Group, has posted a sixth consecutive year of losses.

The company on Tuesday reported an annual net loss of HK$21.9 million (US$2.8 million) for 2016 after persistent bad weather and fierce competition hit golf and hotel revenues at its Dongguan Hillview Golf Club.

The golf course was closed down due to bad weather for 426.5 hours last year, compared to just 91 hours in 2015.

The company’s revenue rose 12.6 per cent to HK$182.54 million last year.

HNA Holding said the group would actively explore relevant businesses that can create synergy between us and HNA group.

“We aim to seek merger and acquisition targets in sectors including logistics real estate, logistic warehousing, bulk commodity trading, logistics finance and logistics transport facilities , while closely monitor the economic and trade development situation in “One Belt, One Road” initiative, Southeast Asia and other regions,” the firm said in a filing with the Hong Kong Stock Exchange.

In July last year, the group acquired a grade-A commercial building, known as 17 Columbus Courtyard, in Canary Wharf, London.

We aim to seek merger and acquisition targets in sectors including logistics real estate, logistic warehousing, bulk commodity trading, logistics finance and logistics transport facilities
Xu Haohao, executive director, HNA Holding Group

“It is expected that this property investment will provide steady rental income,” it said.

It also bought a portfolio of eight golf courses in Seattle, United States with a total land area of 1,887.32 acres in December.

The properties consist of a total of 180 golf holes, with clubhouses and various amenities.

“The course acquisitions will enhance and create synergy with [our] existing golf course business by ways of reciprocal club memberships, golf tournaments and golf related tourism products, ” the company said.

The company has cash reserves of HK$1.08 billion and its gearing ratio was 11 per cent from zero in 2015.

Shares in HNA Holding Group edged up 3.5 per cent to close at 29.5 HK cents on Tuesday.

Its controlling shareholder Hong Kong HNA Holding Group has been one of the most aggressive land buyers in the city, spending a total of HK$27.2 billion since November on four parcels of development land on the former airport site of Kai Tak.

Hong Kong HNA is likely to have been funding its acquisitions with bank loans, following its December filing to the Hong Kong Stock Exchange, in which the company pledged 6.39 billion shares of HNA as security for a credit line with banks.

That came after HNA Holding Group won its first residential site in Kai Tak area for HK$8.84 billion in November.

HNA Group is currently leading a deal to acquire an office tower at 245 Park Avenue, Manhattan, for US$2.21 billion, one of the highest prices ever paid for a New York skyscraper, according to Bloomberg, quoting two sources close to negotiations.

HNA may be involved with at least one partner on the purchase, said the sources.

The 1.7 million-square-foot office tower, with tenants including JPMorgan Chase & Co, is being sold by Brookfield Property Partners LP and its 49 per cent partner in the property, the New York State Teachers’ Retirement System.

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