USI Holdings is a non-descript name for a company which is planning to be anything but non-descript. This once sleepy garment company is being transformed by its owners, the Chengs, of Singapore company Wing Tai. In February the group got attention after beating the territory's biggest developers in winning the tender for the Kowloon station reclamation Phase 1. A Wing Tai-led consortium won the right to develop Phase 1 with Temasek Holdings, Singapore Land, Straits Steamship Land, Lai Sun Development and Worldwide Investments. USI is co-manager in the $7.7 billion, 1.6 million sq ft residential project, and an equity investor. Edward Cheng Wai-sun is chief executive of USI and chief executive of the winning Kowloon development consortium, Union Charm Development. Mr Cheng was formerly an executive director and director of finance at Wharf Holdings. He helped build the group's hotel portfolio and its profile in international capital and loan syndication markets. Before joining Wharf, Mr Cheng was at Hutchison Whampoa in China business development. USI is set to become the Hong Kong flag carrier of the Wing Tai Group, with a market capitalisation of $11 billion. Cash generating operations, mainly garment manufacturing, have been shifted to low cost bases, including Burma. Mr Cheng said a stock control review and management revamp had the garment division in better shape. In Britain, the loss-making Campari Investment had been written off, and the prospects for Gieves & Hawkes, Lee Cooper and Knickerbox looked satisfactory. USI plans to capitalise on its links with Wing Tai, which owns 45 per cent of the company, and Sun Hung Kai Properties, with 25 per cent of the company. Along with the work on the Kowloon reclamation, USI has three existing industrial properties, two of which have redevelopment potential and one which can be converted into industrial office use. Plans to launch into telecoms have been put on hold until the delays with the government plans for PCS have been cleared up. Mr Cheng is executive chairman of 60 per cent-owned Mandarin Communications. The USI holding is through a 50-50 joint venture with Lai Sun Development. Partners are China Travel Services (10 per cent), Hong Kong Parkview Group (10 per cent) and Distacom Hong Kong (20 per cent). Distacom was a founding partner at Hutchison Telephone and helped develop Hutchison's Orange network in Britain. Financially, the company remains on a recovery path. Under a restructuring a lot of red ink was expended in 1994, with an operating loss of $11.8 million recorded and a loss attributable to shareholders of $148.4 million. It had a turnover of $1.4 billion in that year. According to Prime East, one of the few brokerages covering the group, profit in the year to December 1995 should head back into the black. Net is expected to be $50 million, with earnings per share at 6.3 cents, rising to $81 million by the end of 1997, with earnings per share at 8.4 cents. For cashflow, the group's closing cash balance is not expected to be positive until the end of 1997. In 1994 it reached a net debt of $339.9 million at the opening balance stage and saw a $242.8 million closing balance. The group net asset value per share is estimated at $1.22.
