The Southwood Group is updating clients on Soho China as Beijing’s biggest CBD Developer’s first half profits double.
The largest of Beijing’s developers Soho China Ltd has seen their latest change in strategic business model richly rewarded with a near doubling in profits for the first half of the year, over the same period last year. The company under CEO Zhang Xin modified their approach from what many describe as a ‘buy and sell’ strategy to a more long term oriented ‘buy and hold’ philosophy, the core changes have crucially affected the way Soho’s bottom line is attained.
By maintaining control over attractive CBD properties for longer periods the company has seen rising income from dependable property rental as opposed to the often more profitable, but more erratic sales earnings that Soho has relied on in the past. First half profits for the Chinese developer rose to 537 million Yuan , up from 233 million Yuan a year earlier accompanied by a doubling of revenues to 2.5 billion Yuan.
“Any changing of a company’s fundamental business approach carries risk and this will of course scare a number of investors. With a positive outcome like Soho’s the rewards are great for those that could see the big picture and a willing to add some risk to their portfolio’s. After a slight slowing in the rental property market first quarter we are now seeing a rebound which Soho is well poised to capitalize on,” said Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
With changes in its leasing operations matching up swings in the property market the attraction of Soho to investors has not been overlooked by the market with the company’s stock gaining 3.2% for the year and paying a dividend of 0.12 yuan per share, despite the Hang Seng’s 3% loss for the same period. ROI for the year stands at an impressive 31.97%.
“Soho has been a consistently well performing company, even in more trying times, coupled with what has now been shown to be a very smart move strategically in terms of core business strategy, it’s an even stronger candidate for investment now as the outlook for the property sector improves. We are seeing more clients local to the region investing in this sector, we will continue to advise clients and new investors how best to enter this complex market ensuring that best outcome is achieved,” said Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
As an equity-research house, The Southwood Group specialises in providing fundamental research and data analysis, ultimately facilitating trend identification, and finally stock selection. The company has professional managers with extensive experience in all aspects of investing and legal compliance, all of whom had spent their careers in the global finance industry from Hong Kong to New York. It is established on ideals of perseverance, enduring commitment to its clients and, most of all, due diligence.
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