Ho Hup Construction expects better performance this year
KUALA LUMPUR: Ho Hup Construction Company Bhd expects to perform better in fiscal 2018 with three new property launches in Bukit Jalil, Kulai and Kota Kinabalu this year, coupled with earnings derived from its joint-venture with Malton Bhd.
Ho Hup chief executive officer Datuk Wong Kit-Leong said the three new launches have a gross development value (GDV) of RM1.7 billion.
“We have done a project soft launch in Kota Kinabalu, Sabah, with a GDV of RM800 million. Response have been positive and we expect to see the impact of this to kick in towards the third quarter of this year,” he told reporters after the company’s annual general meeting yesterday.
The Kota Kinabalu project comprised a Crown Plaza Hotel and serviced apartment to be called “The Crown”, he said.
“In Bukit Jalil (Kuala Lumpur), our project consists of two tower blocks with 750 units of serviced apartments, while in Kulai (Johor), we are developing a mixed township, Laman Iskandariah, over 174.02 hectares of land. We will launch the first phase comprising shops with a GDV
We have done a project soft launch in Kota Kinabalu, Sabah, with a GDV of RM800 million. Response have been positive and we expect to see the impact of this to kick in towards the third quarter of this year. Datuk Wong Kit-Leong, Ho Hup chief executive officer
RM400 million in the third quarter of this year.
“It is our first township development in Johor,” he added.
Ho Hup recorded a decline in revenue and earnings in the last three years mainly due to the company’s decision to hold back its property development in these three locations, said Wong.
The joint-venture project with Malton – Bukit Jalil City – had already contributed earnings in the last six months and the company expected to see bigger contributions from this development, he added.
Ho Hup, which owns 202.34 hectares of landbank in Bukit Jalil, Kulai and Kuantan (Pahang) with GDV of over RM4 billion that will last it for the next 10 years, aims to start expanding its landbank in December this year.
“Maybe in the next six months towards the end of the year, we will start actively looking to increase our landbank. Even if there is a good land (available) now, we will keep it in view as we want to focus on launching our projects and execute them well,” he said.
Asked on the zero rating of the Goods and Services Tax effective June 1 announced recently, Wong said the move would reduce raw material prices.
“But in terms of getting new government projects, we are still waiting for new guidelines on government procurement and tenders,” he said, adding the company’s order book consisting of government infrastructure works currently stands at RM400 million.
Wong said the current order book would keep the group busy for the next three years, and it aimed to replenish this by another RM200 to RM300 million.