CNQC Announces 2023 Final Results Total Revenue Increased By 26% to About HK$ 10.4 Billion Seizing The Market Opportunity And Cooperating With The Government Plan Constrution Business Is Advancing

CNQC Announces 2023 Final Results

Total Revenue Increased By 26% To About HK$ 10.4 Billion

Seizing The Market Opportunity And Cooperating With The Government Plan 

Constrution Business Is Advancing 

 

During the reporting period, the total revenue of the Group amounted to approximately HK$10.4 billion, representing an increase of approximately 26% compared to the same period last year, primarily due to a significant increase in construction revenue in Hong Kong. Despite the high global inflation, rising market interest rates, and factors such as geopolitical tensions leading to increased construction and sales costs as well as supply chain instability, the Group recorded a significantly narrowed net loss by 28% to approximately HK$371 million (2022: HK$513 million). The gross profit margin improved to approximately 2.6% (2022: -0.5%), mainly attributed to the completion of several delayed construction projects in Singapore due to the impact of the COVID-19 pandemic, coupled with stable profit margins from newly awarded projects in Singapore and Hong Kong. The steady development of core business in Hong Kong and Singapore has maintained the overall operations of the Group positively, with an outstanding construction contract amount of approximately HK$15.38 billion remaining, along with sufficient cash and bank deposits on hand to support future project operations, ensuring the stability of the Group's operations.

 

Construction Business

During the reporting period, the Group actively pursued the development of construction projects in Hong Kong, Singapore, and Southeast Asia, focusing on public and private construction projects, including superstructure construction, foundation engineering, and pile foundation projects. Benefiting from favorable government planning and increased residential demand, the Group's revenue from foundation and construction contracts in Hong Kong and Macau amounted to approximately HK$3.4 billion, an increase of approximately 63% compared to the same period last year HK$2.1 billion. Within the year, the Group successfully secured 29 new foundation and superstructure construction projects, with a total contract value of approximately HK$4.565 billion. Leveraging its rich construction experience and advantages in modular construction technology, the Group secured a public housing construction project awarded by the Hong Kong Housing Authority and a modular construction project awarded by Kowloon Lees Consortium. The public housing construction project involves the construction of buildings in the First and Second Phases of the public housing development project at Tai Wo Hau Road, while the modular construction project is a transitional housing project awarded by The Lok Sin Tong Benevolent Society Kowloon, aiming to build Hong Kong's first eight-story transitional housing. With a total of 48 ongoing projects, the outstanding contract amount is HK$5.432 billion.

 

During the reporting period, revenue generated from projects in Singapore and Southeast Asia amounted to approximately HK$7 billion, an increase of approximately 13% compared to the same period last year. Within the year, the Group completed five external construction projects in Singapore. Benefiting from the demand for public housing in Singapore and private integrated developments led by government land sales, the Group seized market opportunities and secured three new public housing projects and one condominium project awarded by the Singapore Housing and Development Board, including the Punggol North Contract 15 residential project, Choa Chu Kang Neighbourhood 8 Contract 12 residential project, and Bukit Batok Neighbourhood 4 Contract 26 residential project. In addition, one private condominium project and one private facilities project were added to the Southeast Asian construction market, with a total contract value of HK$4.2 billion in Singapore and Southeast Asia combined, along with 25 external construction projects on hand, totaling an outstanding contract amount of approximately HK$9.95 billion.

 

Property Development Business

During the reporting period, the Group focused on developing and selling quality residential projects in Singapore, including two private condominium development projects and two executive condominium projects, with a total saleable area of approximately 160,800 square meters. The private condominium project, Forett at Bukit Timah, achieved a cumulative contract sales rate of 100% during the period, with 633 units sold, generating confirmed presales revenue of approximately HK$2.602 billion. Another private condominium project, The Arden, with a total saleable area of approximately 9,687 square meters, commenced sales in August 2023, achieving a contract sales rate of approximately 34% during the year and is expected to be completed by March 2025. The cumulative contract sales rates for the jointly invested projects, Tenet and Altura, are approximately 99% and 82% respectively. These executive condominium projects are expected to be completed by June 2025 and 2026 respectively. During the reporting period, the Group received several industry awards, including the Top 10 Developers in Singapore by BCI Asia.

 

In terms of land reserves, the Group steadily expanded its land reserves in Singapore during the year to continue project development in the coming years. In Singapore, the Group, in partnership, successfully acquired the ownership of the Media Circle plot of the one-north mediapolis in Singapore and plans to develop a private residential project with approximately 350 residential units, one floor of commercial space, and one floor of underground parking, along with public facilities and landscapes. In Hong Kong, the Group, in partnership, completed the acquisition of all four lots at Nos. 163 to 169 Yuen Chau Kok Road, Sham Shui Po, Hong Kong, and plans to redevelop them into residential buildings with an accompanying commercial platform. The demolition work was completed in the fourth quarter of 2023, and the project is planned to adopt a modular construction model. The development architectural drawings for the superstructure construction of the joint venture acquisition in Tai Po were approved in December 2021, and the next phase of construction planning is currently underway.

 

Mr. Wang Congyuan, Chairman of CNQC International, commented, "In 2023, global economic growth slowed, with high interest rates and inflation, coupled with lower consumer income expectations and increased construction and operating costs, posing challenges to the real estate construction industry. However, government urban development plans and supportive policies have effectively stimulated market demand for housing construction and infrastructure, creating new development opportunities. The Group responded to the situation, seized market opportunities, comprehensively laid out the housing construction markets in Hong Kong, Singapore, and Southeast Asia, and successfully harvested significant new construction contracts during the year. The Group flexibly adjusted its operational strategies, closely monitored diverse market and business trends, enhanced competitiveness while actively seizing different opportunities."

 

"Looking ahead to 2024, with economic stimulus measures and real estate policies being implemented by governments worldwide, both the macroeconomy and the real estate industry are expected to gradually recover from the downturn. The Hong Kong government's comprehensive withdrawal of the cooling measures is expected to activate the property sales market, alleviating the subsequent impact of the previous economic downturn. In addition, the Hong Kong government announced in its policy address that it plans to build approximately 410,000 public housing units in the next 10 years. The Group has already won several transitional housing and public housing construction projects in Hong Kong and will continue to leverage its modular construction technology to contribute to both profit levels and social housing welfare. On the other hand, the Ministry of Trade and Industry of Singapore predicts an improvement in the economy, with annual construction demand expected to reach between S$31 billion and S$38 billion from 2025 to 2028, indicating an upward trend in Singapore's property market with good investment prospects. The Group will undoubtedly seize the opportunities in the housing construction markets of Hong Kong and Singapore, continue to advance existing projects steadily, expand its business further, increase the Group's market share and competitiveness, and establish a sustainable development path, creating higher long-term returns for shareholders and investors."