CENTURY GP INTL has a strong financial position to capitalize on opportunities in emerging markets and implement future growth plans

According to the announcement from CENTURY GP INTL (02113), the company's board of directors has confirmed that despite the current poor market conditions, the company's business operations remain fundamentally stable. Affected by the economic downturn and the weak real estate market, the group is striving to cope with the slowdown currently faced by the construction industry in Hong Kong. As a result, market dynamics have led to a reduction in private sector construction projects and intensified competition, prompting participants to adopt more aggressive bidding strategies. The company acknowledges that its past emphasis on site preparation, tunnel construction, and blasting projects has limited its ability to fully capitalize on certain emerging market opportunities, particularly those arising from newly developed initiatives such as the Northern Metropolis. To respond to the fiercely competitive market environment, the company has actively implemented strategic adjustments aimed at expanding its business scope, including reconstruction, upgrading, and renovation projects, thereby enhancing the company's market competitiveness and positioning.

The group is actively exploring opportunities in reconstruction, upgrading, and renovation projects. The contract value of these projects typically ranges from HKD 2 million to HKD 30 million, with construction periods of approximately six months to 1.5 years. These projects align effectively with the group's existing technical expertise, owned equipment, and experienced human resources, requiring no significant operational adjustments. Although the contract values of these projects are lower than those for traditional site preparation contracts, their shorter construction periods allow the group to execute multiple projects simultaneously, thereby accelerating revenue cycles and optimizing resource utilization. The company leverages its good reputation for reliable project execution to obtain these contracts primarily through client referrals and established relationships with construction companies.

The company is in the final negotiation stage for a renovation and reconstruction project in Hong Kong worth HKD 13.8 million, which is expected to sign a formal agreement by March 2025. Additionally, the company is in preliminary discussions for three other renovation projects in Hong Kong, with a total contract amount of HKD 12.2 million.

Furthermore, the company is actively negotiating with potential partners for the Hengqin Port private commercial and residential development project, viewing it as a strategic opportunity to enter the mainland China market as a contractor. This potential project will enable the group to leverage its mature expertise in construction and site preparation, benefiting from the increasingly integrated and economically developed Greater Bay Area.

In addition to its core construction business, the company is also seeking other potential opportunities to diversify its revenue sources and enhance shareholder value.

The company has a strong financial foundation to implement its business strategy. Construction projects (including reconstruction and renovation works) typically require clients to pay a deposit of 20% to 30% of the total contract amount. These advance payments, along with subsequent phased payments during the project, ensure stable cash flow for project implementation. Furthermore, the company has secured a loan facility of HKD 15 million to support its operations and is confident in obtaining additional financing for construction projects when needed.

Given these financial resources, the company expects no funding shortages in executing its business plans. The company still maintains a good financial condition to seize opportunities in emerging markets and implement future growth plans