FY15 profitability now relies on market volume
● Midland announced its FY14 results, with after-tax profit of HK$64mn coming close to ourforecast of HK$68 mn, and representing a turnaround from a loss of HK$204 mn seen in FY13. Looking closer into the 2H14 numbers, it has also exhibited a sharp turnaround with 2H14 PAT of HK$100 mn vs. 1H14 LAT of HK$36mn. No dividend was declared.
● Part of the FY14 turnaround was a result of management effort in cost cutting across the board (except the staff commission), from advertising to branches in China.
● A little room for further cost cuts in FY15. Instead, the revenue and the profit in FY15 will mainly be driven by transaction volume, especially that in primary market.
Turnaround in 2H14 to a full-year profit—
Midland announced its FY14 results, with after-tax profit of HK$64 mn coming close to our forecast of HK$68 mn, and representing a turnaround from a loss of HK$204 mn seen in FY13. Looking closer into the 2H14 numbers, it has also exhibited a sharp turnaround with 2H14 PAT of HK$100 mn vs. 1H14 LAT of HK$36 mn. No dividend was declared.
Little room for further cost cuts—
market volume to be the key topline and profit driver for FY15 Part of the FY14 turnaround was a result of management effort in cost cutting across the board (except the staff commission), from advertising to branches in China.
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