WEIYE: 1H2013 revenue up 3-fold, stock price up 25% in 2 weeks

Weiye's stock price languished at 5 cents and below for close to half a year before rebounding sharply last month on hopes of strong earnings release. Bloomberg data

WEIYE HOLDINGS' stock price surged 25% to 7.9 cents over the 2 past weeks, beginning the climb ahead of its announcement of a stellar set of 1H2013 results.

Executive chairman and CEO Zhang Wei wants to provide mid-to-high net worth individuals with luxurious holiday homes in Hainan. NextInsight file photoThe run-up in stock price began a month ago from 5 cents on 18 July.

It surged to 7.9 cents on 25 July, gave up some gains and rebounded strongly when the strong set of results was released on Monday.

Strong buyer demand for real estate helped the PRC property developer triple its 1H2013 group revenue year-on-year (yoy) to Rmb 333.5 million, boosted by a 370% increase in revenue recognition of property sales of Rmb 296.3 million.

In China, nationwide property sales grew more than 43% yoy in 1H2013 despite slower economic growth and property cooling measures.

Weiye's net profit was Rmb 100.2 million, reversing a loss of Rmb 3.5 million in 1H2012.

During 2Q2013, a higher total gross floor area (GFA) of 53,527.5 sqm was handed over to customers from its Weiye Xiangdi Bay, Weiye Oxygen Town and Weiye Costa Rhine projects compared to 6,075.7 sqm for 2Q2012.

Its property segment revenue surge was tempered by a dip of 22% yoy in 1H2013 sales from clean room equipment and air diffusion products to Rmb 37.2 million due to weaker demand in Southeast Asia and sluggish growth in construction activities for residential and commercial projects in Singapore.

Gross margin dip from more residential sales

1H2013 property development gross profit margin decreased by 8 percentage points to 39% due to two reasons:

Firstly, there was higher construction cost of the Henan projects.

Secondly, more residential properties sales were recognized in 1H2013 compared to 1H2012.

Architectural model of Weiye Oxygen project at sales showroom. NextInsight file photoResidential properties (Weiye Oxygen Town) sold at lower average selling prices compared to resort properties (Weiye Costa Rhine).

Project pipeline

Its project in Henan province, Phase 3 of Weiye Central Park with GFA of 113,294.0 sqm, is expected to complete this year.

It has three other on-going projects in Hainan province:

>> Weiye Costa Rhine (GFA 12,608.0 sqm) expected to complete by 2013

>> Weiye Rhine Coast (GFA 15,505.0 sqm) expected to complete by 2014

>> Phase 2 of Weiye Oxygen Town (GFA 67,050.8 sqm) expected to complete by 2014


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