Chang Hong Construction: Worst of Housing Market Over, Expects Policy Easing in Q3

Chang Hong Construction Chairman Li Wenzao stated that the central bank's housing market control measures have been implemented for nearly two years, leading to a cooling of housing transactions and a slowdown in price increases, with policy effects gradually becoming apparent. He expects the earliest easing to occur in the third quarter. The company launched five new projects this year with a total sales value of approximately NT$29 billion, and the current sales rate is about 80%. He is "not pessimistic" about the second-half housing market, believing the worst is over.

Chang Hong Construction held its shareholders' meeting today, chaired by Li Wenzao. The meeting approved the 2025 annual report and earnings distribution plan, with a cash dividend of NT$5.5 per share. Last year's revenue mainly came from the recognition of "Chang Hong Tian Yun" at approximately NT$3.3 billion, "Song De Chang Hong" at approximately NT$2.3 billion, "Zhong Xiao Yong Ji" at approximately NT$1.5 billion, along with construction engineering revenue of about NT$1.1 billion and rental income of about NT$260 million.

Regarding the outlook for the second half of the year, Li said that nearly two years have passed since the central bank imposed the 7th wave of housing market controls in September 2024. Some suburban areas (protein districts) and existing home prices have shown signs of softening, and the upward trend in the pre-sale market has also slowed significantly. He believes the central bank's policy goal of cooling the housing market has been gradually achieved, and he expects the earliest opportunity for easing could be seen in the third quarter.

Asked whether the recent stock market surge is crowding out funds from the housing market, he stated that in the short term, some funds have indeed shifted to the stock market. However, both the stock and housing markets are essentially part of the capital market. Once the stock market rally slows, funds may flow back into the real estate market.

Li noted that the Chang Hong ICT Technology Building in Beitou-Shilin Tech Park has been completed. Due to its prime location less than 100 meters diagonally opposite NVIDIA's headquarters, it is currently receiving high levels of inquiry. The planned unit price is approximately NT$980,000 per ping.

Li pointed out that Chang Hong ICT will first attempt to sell the building as a whole for six months. If a sale is not successful, they will consider selling it floor by floor. He is optimistic about the future formation of an industrial cluster in Beitou-Shilin Tech Park and the demand from the tech industry chain for relocation. The project is expected to launch this year, and based on its ownership share, Chang Hong can recognize total sales of NT$12 billion.

Additionally, the Chang Hong Hongchuang Technology Building in Nangang, with a total sales value of approximately NT$14 billion, was launched on June 1st. He pointed out that the total sales value of the two major office projects in Beitou-Shilin Tech Park and Nangang is approximately NT$26 billion, which has a good chance of contributing to performance next year.

Regarding project planning, Li said that Chang Hong plans to sell five new projects this year, including one office project and the rest residential, with a total sales value of about NT$29 billion. The overall sales rate has reached about 80%. Next year, the company plans to launch seven new projects, including five residential and two office projects, located in Xinzhuang, Zhonghe, Neihu Xihu Section, and Beitou-Shilin Tech Park's Xinzhoumei Section. The total sales value for projects from this year to next year amounts to NT$84 billion.

Furthermore, Li said that the factory-office project in Beitou-Shilin Tech Park's Xinzhoumei Section will also commence construction and is scheduled for completion in 2028. Currently, Chang Hong has sufficient land inventory to support future development needs, with a potential project volume of nearly NT$190 billion over the next five years.