Nam Tai Property Inc.
Q3 2021 Earnings Call Transcript

Published: 8 Nov 2021

[Operator:]

Greetings. Welcome to the Nam Tai Property Inc. Q3 Earnings Call. At this time, all participants are in a listen-only mode. Please note this conference is being recorded. I will now turn the conference over to Nam Tai Property to begin. Thank you.

[Raymond Wen:]

Good morning. Thank you for joining the call to review our third quarter results. Hopefully, you have had the chance to review our earnings release. As usual, they're available including the earnings presentation that we will be referring to during the call on our Investor Relations section of the namtai.com website. I'm going to turn the call over to our Chairman, Lai Ling Tam, to open the call. After that, our CFO, Terrence Lu will cover the details of the quarter. Before I turn the call over to Lai Ling Tam, let me remind you that we may make some forward-looking statements during the call regarding where we are as says of the financial results. Forward-looking statements are based on management's current expectations and assumptions. They are subject to risks and uncertainties. Factors that may cause actual results to materially differ from expectations, are detailed in our earnings materials. Our SEC filings on our website. So with that let me turn it over to Lai Ling Tam.

[Lai Ling Tam:]

Good morning and thank you for joining us today. PRC government continued to roll our restrictive measures to crack speculation in the domestic problems in market in the reporting period. The real estate sector is experiencing extremely challenging, both financing and operating environments. And there have been a number of high-profile defaults reported in the media. With the tightening policy, loans to the real estate factor, recorded decrease for the first 9 months of 2021. The Company is also facing similar difficulties, including slowdown in demand, declining housing and office price, and also liquidity crunch. To meet the challenging operating environment, we made considerable progress in the past quarter. Quarterly, revenues significantly increased year-over-year. Pre -sales on Wuxi project commenced. Occupancy rates materially increased, and construction for the Nam Tai Technology Center was underway. With the success in securing new financing from Bank of Guangzhou, the Company is confident that it will restore the normal operations of the Company and it's subsidiaries gradually. As we approach the end of 2021, we are hopeful about the prospect of Nam Tai. Our work continues to progress and we are standing up in the crowd into our operational and design excellent. Now, Terrence Lu will discuss the details of our financial and operational performance.

[Terrence Lu:]

Thank you, Dr. Tam and good morning all. I would now like to point your attention to the earnings presentation deck, Slide 6 for Q3, 2021. Our revenue was $5.8 million, an increase of $4.7 million year-on-year, or 442.7%. Net loss from operations was $3.3 million, reduced from net loss from operations of $5.8 million in the third quarter of 2020. Consolidated net loss was $4.3 million, reduced from consolidated net loss from operations of $4.9 million in the third quarter of 2020. Real estate properties under development net was $317.9 million as of September 30, 2021, an increase of $5.7 million from the end of 2020, leasable floor area of approximately 365,000 square meters, with 85 % located in Shenzhen and 15 % located in Wuxi and Shanghai. Total occupancy rate of available units in our projects increased from 68 % in Q2 2021 to 72 % in Q3 2021. Occupancy rate of Shenzhen projects increased from 63 % to 67 % in Q3, 2021. On Slide 8, occupancy rate of Inno Park increased from 59 % to 69 % in Q3, 2021 with around 181,000 square meters of quality industrial spaces being leased to technology enterprise tenants and other customers. Since Q2 2019, we have seen a quarterly growth rate of approximately 33 % in leased gross floor area. Also, we have gone from a 5 % occupancy rate to 69 % in the same period. On Slide 9, Nam Tai Longxi pre -sale commenced after permit issued. The Company has obtained the pre -sale permits for Towers 1, 2, and 6 of Nam Tai Longxi on July 2021, and commenced the pre -sale of the first batch of 260 residential units, which are equivalent to 27,899 square meters in gross floor area on August 2021. As of September 30, we received earnest to money from purchases of a total 78 new units of approximately 9,144 square meters in gross floor area. On Slide 10, we improved our liquidity position despite the challenging operating environment. The Company secured a loan facility of $164 million to adjust this liquidity issues. We have jumped approximately $88.6 million under the loan facility and have repaid the amount due to the Bank of Beijing, and industrial bank in in September 2021. The next few slides visually show the progression of development across our properties. On Slide 16, in Q3 2021, we continue executing our industrial chain initiatives and provided our corporate tenants with several industrial events, covering tenants, recruitment, technology, facilitation, financing, and the policy consulting ending to support the growth of our corporate tenants and the technology community. We arrange a campaign field months for talent service in September 2021. Including a number of relevant activities to support our corporate tenants with talent recruitment and employee retention. And we established the QAPEC, Qlean Production Empowerment Center and biological product research and development platform partnering with businesses to provide technical services for tenants. On slide 17, our unique industrial service, strategy, and exceptional performance have been highly recognized by the local officials. In Q3, a number of local officials visited Nam Tai Inno Park and the branch of Guangming District Administration Service Center, praising our Industrial Services and corporate tenant initiative. On Slide 18, our Technology Park received international recognition for design excellence. Nam Tai Inno Park was awarded the gold winner for Lighting Design by MUSE. This recognizes the increased activity and design excellence Nam Tai has built our project with. On Slide 20, you can see visually the progress we have made. The revenue for first 9 months of 2021 was $84 million, higher than the revenue for the full year of 2020, which is $71 million. We will continue to progress and strengthen the business as these trends demonstrates. On Slide 21 and 22, you can see our full financials. Thank you. And now, I would like to hand the call back to our Chairman, Dr. Tam.

[Lai Ling Tam:]

Thank you. We are looking forward to executing our strategy to bring long-term value to our shareholders. Given the strength of our leadership team, we are confident the business will continue to grow. The board of directors and management will make every endeavor to act for the best interest of the Company and all shareholders. Thank you all for joining us and we look forward to speaking with you-all next quarter.

[End of Q&A:]

Thank you. This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation and have a wonderful day.