The financial resources of the Group are all derived from the leasing of properties in the People's Republic of China (excluding Hong Kong) (the "PRC" as well as the property management services in Fuzhou City, Fujian Province, the PRC and bank interests.
On 10th September, 2007, the Company and Taiwan Securities (Hong Kong) Company Limited (the "Placing Agent" entered into a placing agreement. Pursuant to the Placing Agreement, the Company agreed to place 17,800,000 new ordinary shares of the Company of HK$1.00 each at a placing price of HK$1.10 per share to independent investors through the Placing Agent. The transaction was completed before 31st October, 2007.
For the past few years, the continued prosperous economy in the PRC had put the domestic housing price at a high level that prompted the PRC government to intensify its macro-austerity policy and subjected the domestic real estate market to major target of such macro-control measures. It was for this reason that the Group had not acquired additional properties for the Year.
Benefited by the continued economic growth, the shop properties held by the Group through its wholly-owned subsidiaries for leasing had all rented out and brought steady rental income.
In light of the shortage of manpower across all industries caused by the continued booming economy in the recent years in the PRC, and the soaring operating cost resulting from the fierce competition in property management business, the Group is in the process of phased retrenchment of its contracted property management business as well as related staff.
Despite the State Government's intensified macro-austerity efforts to prevent over-heat of economy against a backdrop of continued steady development of economy in the PRC, it is believed that the focus of such austerity measures has shifted from over-heat of real estate market to deteriorating price-hike and inflation. This is favorable to the Group's effort in identifying investment property projects in the PRC. The Group is closely monitoring the development and opportunities of the property market with an aim to improve its profitability and enlarge its income base.