bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

hooksAmpRedirectArticle

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

paywallTypes

createdDate

publishedDate

urlAlias

moreOnThisArticles

sponsorType

commentCount

authorLocations

authors

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

articleSpeeches

socialHeadline

headline

images

flag

firstTopic

glossary

flattenTypeIds

image

relatedLinks

relatedNewsletters

__typename

sponsor

pdfFiles

seriesReverseOrder

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

readingTime

customTimezone

liveContents

Sandy Li

Vincent Lo Hong-sui, chairman of Shui On Land, has introduced a string of measures to shake up his firm's senior management to improve property sales, expand its land bank and streamline development strategies.
The company has been criticised by investors for its slow turnover in assets and focus on urban redevelopment projects that involve heavy capital but long payback periods.
The January 10 announcement that chief executive Freddy Lee Chun-kong is stepping down highlighted Lo's reform drive.
"The restructuring is aimed at enhancing the efficiency of execution. We need to act promptly to the change in market demand if we want to achieve higher property sales," he said.

	We need to act promptly to the change in market demand to speed up sales

	VINCENT LO, CHAIRMAN, SHUI ON LAND
An executive committee headed by Lo will be formed and take on the company's key management role and make executive decisions at its biweekly meetings.
After two years of disappointing performance and concerns from institutional investors, Lo has taken a more active role in Shui On since the middle of last year. He even apologised to shareholders when the firm reported full-year profits plunged 87 per cent year on year to 201 million yuan (HK$255.7 million) in 2012.
Under Lo's effort, results have improved. Total contracted property sales reached 16.6 billion yuan last year, 151 per cent above its target. Of that, 9.9 billion yuan came from residential sales and 6.7 billion yuan from the sale of commercial properties.
"We have hired consultants to come up with an incentive scheme such as providing bonus to the teams to speed up development," Lo said. "We need to act promptly to the change in market demand to speed up sales. You will not be surprised to see me at a construction site with my sleeves rolled up."
Alan Jin, an analyst at Mizuho Securities, said mainland developers like Country Garden - which achieved sales of more than 100 billion yuan last year - could release mass residential projects for pre-sale as fast as one year from the date they bought the land.
"Investors like fast-growing stocks. The higher contract sales the company can generate, the better the share performance," he said. "Shui On is moving in the right direction. But [it] still needs … to [be] observed if it can deliver its performance."
Shares in Shui On have lost nearly 50 per cent in the past 12 months to close at HK$2.40 on Friday.
With interest rates expected to head upwards this year, Jin said the profit margin of highly geared companies would be squeezed.
Shui On's gearing ratio was 59 per cent in June last year. The deferral of the US$1.5 billion proposed spin-off of its commercial property arm, China Xintiandi, has forced the firm to dispose of assets to cut debt.
Last month, it sold its 99 per cent interest in a proposed 790,000 square metre commercial, office and retail project in Shanghai's Taipingqiao, due to be completed this year, for more than 3.32 billion yuan to China Life Trustees. The company is expected to generate a gain of 192 million yuan from the disposal.
Lo said Shui On would be more active in land replenishment.
"Many city governments have invited us to replicate Shanghai's Xintiandi retail-hotel-entertainment project in their cities. But we will not get involved in resettlement and will let the municipal governments handle it," he said.
Negotiations are under way on two development sites in which Shui On will be responsible for master planning and the basic infrastructure before the plots are put up for government auction. "We will share the profit with the government after the land [is] sold. We may also bid for the land," Lo said.


Hong Kong-listed developer Shui On Land says it has resolved flat owners’ complaints at joint venture project in Wuhan

Kerry Properties becomes latest Hong Kong developer to make huge land acquisition in China

Shui On Land cashes in on opportunity to build land bank in China amid depressed buying sentiment

Hong Kong’s IPO pipeline fills up as Ximalaya, Xintiandi seek to list, helping city catch up with New York in global fundraising race

Shui On Land

Shui On boss shakes up management

Vincent Lo has taken a more active role in Shui On since the middle of 2013 after two years of dismal performance. Photo: Jonathan Wong

Property

Hong Kong & China

Vincent Lo Hong-sui, chairman of Shui On Land, has introduced a string of measures to shake up his firm's senior management to improve property sales, expand its land bank and streamline development strategies.
