As might be expected from China’s real estate developer which is least likely to be out of the headlines for more than 24 hours, SOHO China made news for a few reasons this week, as the company had missed its 2011 sales target by nearly 50 percent, while at the same time, CEO Pan Shiyi announced that SOHO plans to spend RMB 10 billion this year on acquiring new projects.
As reported by Reuters, in a conference call with investors on Wednesday, SOHO admitted that the company had achieved sales of RMB 10.9 billion in 2011, well short of its target of RMB 20 billion, and much less than its spending of RMB 15 billion on acquiring new projects.
Despite the challenges that SOHO has faced developing their existing projects and the problems that the company has faced keeping their sales team happy, during the conference call, they announced that their sales target for 2012 would be RMB 23 billion — a 15% increase over 2011.
In the face of these unlikely numbers, Hong Kong’s The Standard quoted Pan as saying that the company is on the lookout for still further acquisitions.
“Land parcels nationwide failed to attract bidders … and five developers in Changsha [Hunan province] fled this week due to debts. We are businessmen, so we are happy to buy more plots at low prices,” chairman Pan Shiyi said yesterday.
This ability to tout new projects despite the outstanding risk to its existing undertakings can’t help but bring to mind that other flamboyant real estate developer, Donald Trump.
- Pan Shiyi has more than seven million followers on Weibo
- Donald Trump has his own reality TV show
- Pan tangles with Fosun over high profile properties on the Bund
- The Donald has a history of conflicts, including using God as an excuse for not paying his debts
- Pan took on the Chinese government over air pollution
- Trump took on Obama on everything from his birth certificate to — trade with China
- Pan Shiyi made his cash creating middle class housing, and then moving into larger commercial projects
- The Donald’s first projects were in residential before he moved into Manhattan skyscrapers and casinos
Of course, let’s hope that SOHO doesn’t end up with as many bankrupt projects as Trump has chalked up.
But following the conference call on Wednesday, SOHO China’s shares were trading up 4.9 percent thanks in part to a statement from the People’s Bank of China on Tuesday that banks must provide loans to first-time home buyers, but also perhaps due to China having more confidence in developers who tout their real estate loudly than remains in some more mature markets.
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