Following the initial write-up in August, Hopefluent has announced a pretty decent set of
results for six months ended 30 Jun 2017. Sales turnover increased by 29% to HK$2,247mil
while profit attributable to shareholders of the company increased by 32% to
HK$122M.
On a trailing twelve month basis, the company continued
to experience growth in its businesses.
For six months ending June 2017, all business
segments experienced growth over the same period last year.
1.
Primary Property
Real Estate Agency Service Business
Business performance in core cities such as
Guangzhou, Shenzhen, Foshan, Dongguan and Hefei grew notably, which further
consolidated Hopefluent’s industry leadership advantages. The Group allocated
its sales teams of primary and secondary property real estate agency businesses
with flexibility and strived to accelerate the business development in second-
and third-tier cities such as Nanjing, Wuhan, Zhengzhou, Jinan, Guiyang,
Nanning, Zhongshan and Zhuhai, and further capture the market share in those
areas. As of 30 June 2017, turnover of the segment amounted to HK$1,383.7
million (2016: HK$1,069.4 million), an increase of approximately 29% from the
last corresponding period.
2.
Secondary Property Real Estate Agency Service Business
Turnover increased by about 34% to about HK$597.3
million as compared with the corresponding period last year (2016: HK$444.9
million) from handling around 32,500 secondary property transactions (2016:
26,400). In the past six months, although the property policies in China have
become moderately more restricted, the Group has won the trust of customers and
delivered outstanding results for this segment with its quality and reliable
services and nationwide business coverage. The number of branches of the Group
increased from around 400 at the end of 2016 to 430 during the review period,
and the number of staff also grew from 7,200 to 7,600.
3.
Financial
services
As at 30 June 2017, loans originated from financial
services exceeded HK$1.5 billion and turnover was approximately HK$52.3 million
(2016: HK$39.4 million). The Internet financial service platform has been
operating for nearly two years and has performed so well that it has become the
Group’s growth spotlight. The Group has continued to enhance its strong cooperation
with various renowned and reputable financial institutions. It also worked
closely with partners from different sectors such as offline points-of-sale,
secondary branches and community resources to build an extensive financial
customer base. It has strived to meet the demand of consumers through
optimizing the O2O sales model and increasing the value of the transaction
chain. The Group’s financial service products feature small amounts, diverse
targets, short cycles and controllable risk, and these products have gained the
widespread recognition from customers since their debut.
4.
Property Management
Services
In the first half of 2017, this segment’s turnover
increased from approximately HK$188 million in the same period last year to
approximately HK$214 million. The Group has provided property management
services to about 300 residential, office and commercial properties in
Guangzhou, Shanghai, Tianjin and Wuhan with a total gross floor area of
approximately 30 million square meters.
Mr Fu, Executive Chairman, and Ms Ng Wan, Executive
Director, continued to purchase shares from the open market subsequent to the
company’s half year results announcement in August and September, spending a
total of HK$9.9M on share purchases this year.
The amounts these two founders spent on share
purchases were significantly higher than their remunerations received in whole
of FY2016 (Mr Fu: HK$2.4M, Ms Ng: HK$1.8M). Is this a testament of their confidence
in Hopefluent’s future?
MANAGEMENT’S VIEW ON PROSPECTS FOR 2017
-
Chinese economy is expected to maintain the
steadily upward momentum in the second half. The property market will progress under
the macroeconomic control and adjustment.
-
Although a tighter financing environment may
affect the rapid expansion of the property market, market demand is still expected.
-
To suppress rising property prices, local
governments have started to increase land supply this will lead to further
expansion of the market provide opportunities for the group
-
The development of the national policy of
Guangdong-Hong Kong-Macau Greater Bay Area has accelerated. Given that Hopefluent’s
has a core business focus in this key development area and that it occupies a
key position in the market, this provides enormous business opportunities for
the Group.
VALUATION
Based
on the Discounted Cashflow Model (DCM), assuming a ultra-conservative growth
rate project of ZERO
percent and a discount rate of 4% over the 10 year period, the IV is worked out
as follows.
From DCM calculation, Hopefluent seems to be
grossly undervalued at current share price. This is without taking into account
the value to be unlocked from the potential listing of its Property Management
Business.
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