Pan Hong's FY20 earnings surge 107.4% to $22.5 mil on higher revenue and lower finance costs

Revenue for the full year increased by 120.1% y-o-y to RMB643.9 million attributable to the larger control of more residential units of Pan Hong Run Yuan Phase 2, compared to a year ago.

Correspondingly, cost of sales increased 120.4% y-o-y to RMB445.8 million due to the transfer of control of more residential units.

Gross profit margin remained unchanged at 30.8% FY20 as the number of residential units sold for Pan Hong Run Yuan Phase 2 in FY20 remained the same as last year.

Other income and other gains and losses decreased by 38.3% y-o-y to RMB15.8 million, mainly due to the net effect of decrease in interest income and the net fair value gain on financial assets at fair value through profit or loss.

Selling and distribution expenses increased by 57.6% y-o-y to RMB20.1 million in FY2020 on an increase in advertising and marketing expenses incurred for Pan Hong Run He.

Administrative expenses increased by 24.3% y-o-y to RMB18.3 million, mainly due to an increase in staff costs, office renovation and relocation expenses, and design expenses.

As at March 31, 2020, the Group recorded property, plant and equipment of RMB49.1 million, compared to RMB47.8 million from last year. The increase was mainly attributable to the purchase of new office equipment and the leasehold improvement expenses.

In its outlook, the company says remains “cautiously optimistic” on the Middle Kingdom’s mid-to-long term prospects on its property market as there are have been no changes to the country’s fundamental growth factors.

The company’s property pre-sales have started to pick up after China’s property market showed signs of rallying in April 2020. This is despite Pan Hong’s slowdown in property pre-sales in February and March due to the Covid-19 outbreak in the country.

Pan Hong shares closed flat at 6.9 cents on Thursday.