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CHC enjoys stable growth, reports record revenue, net profit

Continental Holdings Corp. (CHC, TWSE stock symbol 3703) today announced its 2017 financial results and 2018 operational plans. In 2017, CHC and its subsidiaries had consolidated revenue of NT$28.385 billion and net profit of NT$788 million, translating into earnings per share of NT$0.96. CHC plans to distribute per-share cash dividends of NT$0.6.

“CHC and its subsidiaries’ 2017 consolidated revenue and net profit both hit record highs,” said Ken Hung, CEO of CHC. “Incomes contributed by all three major business units saw steady growth. This was especially true for our construction and real estate development businesses. Overall, gross profit increase by 47% over 2016, and operating cost reduced by 7%. While we had an investment loss recognized under the equity method, the overall income statement still grew from 2016.”

Construction: Rail and power plants targeted

The civil/building construction business unit accounted for 80.95% of CHC’s total revenue. Income primarily came from CEC, totaling approximately NT$22.978 billion. CEC’s 2018 strategy is to raise gross profit margin and increase earnings from its areas of expertise including railway and high-end building projects, while developing power plant construction as a future core competency. Meanwhile, amid intense domestic and overseas competition, CEC will develop talents in all areas of construction to strengthen competitiveness. In the domestic construction market, CEC will actively take part in large-scale civil engineering projects and will further assess energy-related construction business. Overseas, CEC will enhance local business development and project implementation through partnership with local companies and talent development programs.

Real estate: Expanding to North America

The real estate development business unit accounted for 16.04% of CHC’s total revenue. Income mostly came from CDC, totaling approximately NT$4.554 billion. The current economic recovery and lowering property prices are likely to trigger demands for self-use residential properties, and the real estate market is expected to remain stable and rise in volume in 2018. That said, CDC will prioritize the Taipei, New Taipei and Taichung markets and assess development potential in other metropolises. In terms of product planning, CDC will focus on small-size, luxurious residential properties for self-use residents and first-time buyers based on market demands. In the overseas market, to diversify risk, CDC has secured development projects in San Francisco in addition to its existing investments in Malaysia. In the future it will explore possibilities in other overseas markets as well.

Environmental projects: Entering new markets

The environmental project development business unit represents a steady source of income for CHC. With the approval of the project owners, HEC’s Chung-Li Area Sewerage System BOT Project and Pu-Ding Sewerage System BOT Project have entered the initial construction phase, while the Feng-Shan Wastewater Reclamation and Reuse BTO project is expected to begin operation in Q3 this year. Besides wastewater and recycled water businesses, HEC will develop new business in biomass energy and solid waste sectors.

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