Huayuan Property Looks to Expand Across China, Make More Mergers, Acquisitions
Yicai Global
/SOURCE : Yicai
Huayuan Property Looks to Expand Across China, Make More Mergers, Acquisitions

(Yicai Global) March 7 -- Huayuan Property Co. [SHA:600743] has confirmed its new target regions in southern, central and western China as it looks to expand from its bases in Beijing, Tianjin and Hebei

Chairman Sun Yuyan said the firm would look to grow into Guangzhou and Shenzhen around the Pearl River Delta, Changsha and Wuhan in the center of the country and Chengdu and Xi'an in Western China. It would also look to strengthen merger and acquisition efforts, she added.

"We will gradually expand to other provincial cities around Wuhan, and some second tier cities," Sun said, adding that Huayuan would investigate supply and demand, economic structure and mobility in these areas in order to grow.

Recently, land supply in Guangzhou has been low, causing intense competition in the real estate market. Sun considers the city as somewhere the firm had always wanted to enter, but failed, until they acquired the luxury homes at the city's Dayi Villa in December. She said other nearby cities that caught Huayuan's attention were Shenzhen and Foshan, and other cities in Guangdong province were potential future options.

The firm pursued scale to maintain its advantages, Sun said, which allowed them to survive the market fluctuations of recent years. Huayuan's goal is to live long and healthy, she added.

"The cake gets bigger but you only get one bite," Sun said, "so we should make sure we take the right slice. Be yourself and make your own money," she added, showing pride in the economic efficiency her company operates with. She said net assets income rate at Huayuan reached up to 23 percent, but after intense competition has dropped to 14 percent.

Like many similar enterprises, the firm looked to expand through mergers and acquisitions. In December, it acquired Dayi Villa, once recognized as the best luxury real estate architects in China, and successfully entered the Guangzhou market.

"The projects we discussed and visited last year is as many as we'd seen over the previous five years," said Huayuan's board secretary Zhang Quanliang. The size of future mergers and acquisitions will be decided by our ability to get funds. The firm's finance director, Jiao Ruiyun, said it had already secured more than CNY8 billion (USD1.2 billion) through financing last year.

In January, Huayuan issued CNY736 million worth of products similar to real estate investment trusts.

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