Focus on major cities to help shield Kaisa from market downturn
Firm less affected by the industry downturn due to higher margins from redevelopment projects
Kaisa Group Holdings, a leader in mainland urban redevelopment projects, said it would be able to hit its sales target of 30 billion yuan (HK$37.5 billion) this year and maintain a gross margin of 30 to 35 per cent in the next few years despite market volatility.
Vice-chairman Tam Lai-ling, who is in charge of investment and financing strategies, said the firm had refinanced its debts maturing this year and next, except a 1.5 billion yuan convertible bond due in December next year, making it confident it could ride out the still unfolding downturn.
Tam told the South China Morning Post the company had secured 12 million sqmetres of space for redevelopment in the next few years - 7 million sqmetres in Shenzhen and the rest mainly in Guangzhou.
Redevelopment projects will continue to contribute 25 to 30 per cent of Kaisa's revenue in the next five years. Such projects often generate gross profit margins above the industry average.
The company's gross profit margin increased to 33.8 per cent last year from 32.5 per cent in 2012, while many of its rivals suffered thinning margins despite strong sales.