Taiwan Land's high-profile BOT project on the Taiwanese island of Kinmen, within sight of the eastern Chinese city of Xiamen. Photo: Company
TAIWAN LAND DEVELOPMENT (2841.TT) had an underwhelming 2012.
But a company executive told investors gathered in Shenzhen that the firm was spending now in order to profit later.
Group operating revenue last year slid a substantial 73.7% to 380 million twd, with net profit slipping to 170 million from 550 million in 2011.
Meanwhile, after tax EPS in 2012 stood at 0.28 twd, down 72.5% year-on-year.
“The main reason for the weaker results was a major spending and investment push into new projects by Taiwan Land,” the Taiwan Land executive, who wished to remain unnamed, said in Shenzhen during Friday’s “Scaling New Heights Investor Conference 2013,” sponsored by Aries Consulting.
Despite the investment campaign last year, as of end-2012 Taiwan Land Development had a cash position of 2.85 billion twd, up 47.1% y-o-y, with fixed land asset value 39.9% higher at 2.36 billion.
Leisure tourism is a major undertaking by Taiwan Land. Photo: CompanyTaiwan Land is very bullish on one project in particular – development rights on a protected ecological reserve on the Taiwanese island of Kinmen – a military outpost within sight of the East China industrial city of Xiamen and just a 30-minute boat ride away.
“We’re in constant contract negotiation stages for the Kinmen project and we hope to pattern it somewhat like Macao.
“As Kinmen is just offshore the city of Xiamen, it’s in a perfect location and PRC visitors won’t have to travel far at all,” the Taiwan Land executive added.
Kinmen also possesses a key geographic advantage due to its proximity to an increasingly popular tourist destination for an expanding Chinese middle class with a growing case of wanderlust.
“As an administered area of Taiwan, Kinmen offers cheap domestic flights to the Taiwan main island. In fact, our proposed shopping and entertainment complex on Kinmen is a very short walk from the airport there,” he said.
The Group is planning construction of a “green” hotel to complement the area’s focus on environmental and ecological balance and conservation, with total rooms on the island under the build-operate-transfer (BOT) project by Taiwan Land to number 700.
Growth Sector: Leisure agriculture is also part of Taiwan Land's expansion plan. Photo: CompanyThere is a major shortage of hotel rooms on Kinmen at present, with a total of just 1,110. So with Taiwan Land's plan to add 700 more -- or well over half the current total -- the firm is very upbeat on prospects there.
This is especially true considering that a staggering 3.5 million PRC tourists visit the small island every year, so there is a severe hotel room shortage which Taiwan Land is all too pleased to help remedy.
“There will be a duty-free retail shopping street just a short distance away and it is expected to be a magnet for growing numbers of tourists from the PRC. We have high hopes for this investment opportunity,” said the executive.
Taiwan Land is the largest non-government owned private landholder on the island, with several development projects currently in contract signing stages.
Its core focus is on cultural and technology-themed property development, with a constant emphasis on adding newfound value to real estate.
Its main endeavors are industrial park development, self-owned assets, urban renewal and build-operate-transfer (BOT) projects.
In the second half, PRC visitors to Kinmen were for the first time permitted to apply for multiple-entry one-year visas upon entry, which makes the Taiwanese island within sight of the PRC a tourist destination with huge untapped potential.
Another attractive aspect of Taiwan Land’s BOT project on Kinmen is the “One Stop Shopping” draw of the retail and entertainment complex which features both an International Duty Free Town and several duty-free shops within the complex.
The venue will boast a planned 400 five-star hotel rooms, an attached shopping mall, an exhibition center and performance hall, with a specific focus on shopping, cultural and eco-tourists from neighboring PRC.
Construction of the shopping mall is already finished with a year-end ribbon cutting ceremony planned.
Market analysis has a conservative estimate for annual operating income for the Mall of at least 3.3 billion twd.
Taking a long-term perspective on Taiwan’s residential property market, Taiwan Land believes it is clear that more prevalent themes down the road will be miniaturization, urban renewal, urban-rural integration, increased cross-straits interaction, “green” sustainability and “smart” buildings.
These six themes will guide the industry going forward and industry players ignore them at their own peril, management said.
In this competitive landscape, many recent products and business directions by Taiwan Land reflect an appreciation for these industry trends.
“We have brought about a fusion of tradition and modern themes in some of our green-friendly construction projects and architectural ethos.
Taiwan Land's recent share price performance in Taipei. Source: Yahoo Finance
"Our Hualian Lohas Creative Park project -- a traditional Hakka-style round-house cultural facility in the picturesque seaside city – is an excellent example of this, as is a beachside spa project and others,” the executive added.
Recent projects have also centered around leisure, sightseeing, entertainment and cultural themes.
Taiwan Land Development is engaged in land development and urban renewal activities in Taiwan, including industrial park development and as well as investment and development of residential and commercial land. The company also develops self-owned assets, including the provision of strategies and sales management for real estate asset activation; and the assessment of new businesses associated with the development of company-owned land and leisure agriculture. Taiwan Land’s comprehensive business scope in several high growth potential sectors has helped the firm become a magnet for investors.
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