Wednesday, 28 March 2012

Weiye Holdings

OCBC on 28 Mar 2012



Weiye Holdings is a real estate developer focused on residential property development in two provinces in China: Henan and Hainan. On 3 Aug 2011, it completed its acquisition of Kyodo-allied Industries Ltd via a reverse takeover, and is currently listed on the SGX mainboard. We recently visited three pipeline projects in Hainan, and believe that Weiye’s property development businesses in Hainan would likely be a focal point for company’s plan for growth ahead. Management has a positive view on Hainan real estate, over the long term, for which they foresee a secular growth in demand as the uptrend in tourism and leisure consumption in China continues. Moreover, Weiye believes that they have an edge over competitors given that Weiye can leverage upon a large network of former clients in Henan - potential buyers of a vacation home in Hainan. We currently have NO RATING for Weiye Holdings.

A property developer in Henan and Hainan, China
Weiye Holdings is a real estate developer focused on residential property development in two provinces in China: Henan and Hainan. On 3 Aug 2011, it completed its acquisition of Kyodo-allied Industries Ltd via a reverse takeover, and is currently listed on the SGX mainboard.

First in Henan, then to Hainan
The company first established itself in Henan and has developed eight projects in the province with a total GFA over 407k sqm since 2001. In 2009, Weiye then expanded its operations to Hainan province on which management plans to base its next phase of growth. Its current pipeline consists of four projects in Hainan and two projects in Henan, making up a total GFA of over 1.2m sqm.

Visit to three Hainan projects
We visited three of Weiye’s projects in Hainan recently: Weiye Costa Rhine located in Wanning City, Weiye Oxygen Town in Tunchang County, and West International Plaza in Danzhou County. Construction for the first two projects is expected to complete by the end 2012, whereas West International Plaza is expected to complete by end 2013.

Focal point ahead on execution in key growth market
From our discussions with management, we believe that Weiye’s property development businesses in Hainan would likely be a focal point for company’s plan for growth ahead. Management has a positive view on Hainan real estate, over the long term, for which they foresee a secular growth in demand as the uptrend in tourism and leisure consumption in China continues. Moreover, Weiye believes that they have an edge over competitors given that Weiye can leverage upon a large network of former clients in Henan who would be potential buyers of a vacation home in Hainan. The company also has sales agencies in other Chinese cities, such as Chengdu, which organize tours for interested buyers to visit their projects in Hainan. We currently have NO RATING for Weiye Holdings.

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