Hullo. Another year, another record high profits at RM 63+million. As I mentioned before, the years of steady increases in profits is due to planning, and executing our plans well. Before I write my annual messages to you, I always re-visit what I wrote in earlier years. A few thoughts come to mind: firstly, it’s like conversing with long-time friends/family members; Hunza’s track record of profitability is per planning, and there is no major negative surprises; a record of growth over the years; decent dividend yields. In fact, to sum up, we have consistently worked hard and smart to deliver.
In fact, even as I write this, you may have read that we have won FIABCI’s Malaysia Property Award 2011 for residential (high rise) for “Infinity”, our beachfront condominium project. I wrote about the transformation of Hunza in my 07 message, developing high-end products for the very top-end. This award best epitomizes the success in our transformation. In addition, in $ term, we are also successful – in my 07 message, I shared with you that at that juncture, the anticipated GDV for both Infinity and Gurney Paragon super-condos was RM 600million; it is with pride that I now share good news with you – the GDV should be above RM 700m for the same 2 projects, without a significant corresponding increase in costs. How did we do it? By building and delivering dreams, in prime location with quality that is demanded by the international market.
OPERATIONS REVIEW
Our latest project, Gurney Paragon, obtained the Certificate of Fitness for Occupancy for the condo phase in June. The selling price per square foot now, as compared to launching, has increased by more than 60%.
The construction of the mall continues at a rapid pace. Simultaneously, together with our leasing agent, we are sourcing names that are established in say, KL, but yet to have a presence here, to come set up shop in Penang.
Sales, not only for our Gurney Paragon condos, but also for Infinity and Seputeh, came in as expected, in terms of both the pace and selling prices.
You would have read in our quarterly reviews that in accordance with Financial Reporting Standards (ie accounting standards) we now have to re-value our mall yearly, even when it’s under construction. We have booked the result of the first ever revaluation (RM 20+million) in current year’s profit.
We are in the midst of completing the purchase of the 40+ acre piece of land in Bayan Baru.
In discussions with analysts, there are 2 main issues of concern in their minds – funding of the Gurney Paragon mall and landbanking.
In my previous message, I have touched upon how we have engineered our gearing ratio to be low. This was done via our latest Rights Issue. We have also obtained financing from OCBC Bank and Great Eastern for the construction of our mall.
Our latest land acquisition in Bayan Baru, at 4+ times the size of our Gurney Paragon integrated development project in terms of land area, I believe, will put us firmly on the national map once we develop it. This land, together with our existing lands in Bandar Kepala Batas and Sungai Petani, will form the basis of our activities in the near and medium term future.
We believe that the Rights Issue +OCBC/GE funding and the purchase of this Bayan Baru land address the aforesaid 2 issues.
In our roadshows (do look out for our presentations; we get invited by stockbroking houses to do corporate presentations; datanglah beramai-ramai!), we present inter alia, comparisons between ourselves and the industry figures. Not so much in terms of size, but the important measurements like, ROE (Return on Equity), margins, P/E ratio, dividend yields, price to book. I am pleased to report that we do very well indeed! These measurements form the basis of a strong case to invest in HPB.
GOING FORWARD
We have to work hard and smart to construct and tenant our mall. We have to plan a “multi-billion integrated development” for our Bayan Baru land. This township is in tandem with the state government’s vision to turn Penang into an international city. We will be launching new projects – Bandar Kepala Batas (landed double-storey terraces and semi-ds), “Alila II” (a GBI, Green Building Index development), as well as Segambut.
We expect our bottom line to be strengthened by the annual revaluation for our mall.
I believe that a successful company is never satisfied with its current performance/position and must always seek breakthroughs (精益求精). This transformation is best illustrated by going from developing affordable apartments and mid range housing for the rakyat to currently developing award winning high-end products that are marketed internationally, and by owning Gurney Paragon mall (which will enable HPB to enjoy a recurring rental income).
Our basic philosophy with regards to “outside” is simple – our customers come first. We eat, live and breathe “customer satisfaction”. Internally, we put faith in professional management. All our managers possess either professional qualification and/or tertiary education. We are also blessed with long-serving personnel. As stated before, we have embarked on our succession programme. We will groom this batch of leaders, and it will be their duty to continue to drive and grow Hunza.
Hunza at IPO (March, 2000) was a RM 80million NTA enterprise. Through hard and smart work resulting in continuous growth, NTA is now RM 450+million.
THANK YOU to all who have contributed to Hunza’s success. My fellow directors and I look forward to meeting up with you at the forthcoming AGM. This year we are having it in the restored St. Joseph’s heritage building. Yes, we are opening the first phase of our Gurney Paragon Mall, and are inviting you to be amongst the first few come and enjoy this marvelous reminder of history. Terima kasih for your support and belief in Hunza; keep the faith.
谢谢
Warmest regards,
