Hersing Corporation

[shanrui_91]

Hersing Corporation Ltd., an investment holding company, provides real estate brokerage, valuation, consultancy, property management, money remittance and lending, and self-storage services.

It operates as master franchisee of the Coldwell Banker Real Estate and ERA Real Estate franchise for the territory of Singapore. It also operates (51%)Western Union's operation in Singapore and Casa Kidi which sells furniture for kids. In a JV with capitaland, Storhub Self Storage serves to provide short-term and long-term storage for commercial and retail customers.

The western Union has a very high ROA of 20% which is very impressive. Western union mainly helps people to remit money back home. This is their prized asset though it is not the main contributor to the bottom line.

While its real estate's ROA is only at 10% in 2011, the asset might have be inflated as there are some investment properties under development which seemed to have been for Storhub. This segment is highly correlated to the property market.

It seemed like Casa Kidi which was started in 2010 by the company has taken some losses in 2011 which has impacted the net profit after tax. Do take note that there is a 12.6m of disposal of investment properties, PPE and intellectual property rights in 2010 as a result of hersing converting storhub to a jv with capitaland.

Just find that the company has some interesting asset especially in its Western union services. The real estate service while interesting is cyclical in nature though it should not be going into losses given the type of service it is offering.

(not vested)

[greengiraffe]

Mr Chua said that ERA does not plan to list this year but still expects to list within the next three years.

INVEST
ERA to focus on selling new property launches
PUBLISHED ON MAY 10, 2014 1:11 AM


"We also encourage agents to do more lower-quantum deals," said ERA chief executive Jack Chua. -- PHOTO: LIANHE ZAOBAO

BY MELISSA TAN
REAL estate agency ERA is shifting its focus to selling new launches as weak property market sentiment eats away at the resale segment, its traditional mainstay.

"We're trying to get more new projects for the agents to sell," said Mr Jack Chua, chief executive of ERA.

"We also encourage agents to do more lower-quantum deals and focus on rental."

In his first interview after the agency was bought by private equity firm Northstar Group in August last year, Mr Chua said that home loan curbs imposed in June had dented the agency's sales.

Compliance costs are also up. ERA recently spent a six-figure sum to implement a system that makes sure its agents do not call people who are on the Do-Not-Call Registry, he said at the firm's Toa Payoh office.

However, he pointed out that ERA's 20 to 30 per cent drop in revenue this year was still much less than the overall market's 50 to 60 per cent plunge in resale transactions.

One factor cushioning the sales decline was that the current softness in the property market was due more to policy decisions than to an economic crisis, he said.

"I've gone through so many cycles, 1996, 2008. If it's policy-driven, we still can overcome it, but if it's a crisis, then it's beyond your control.

"Now we're still able to do something."

One step ERA has taken to cope with weak market sentiment is to train staff even more, he said.

For instance, the firm has developed training programmes that teach agents how to sell properties in overseas markets such as Iskandar, in Malaysia's Johor state, and Australia.

Its network across the Asia- Pacific region has also helped it to sell local projects to foreign buyers. "Mainland Chinese buyers are coming back. We also recently took the Corals (@ Keppel Bay) project to Kuala Lumpur and the Malaysians are buying."

ERA is now gunning to be the marketing agent for more new launches, which Mr Chua said make up a rising share of revenue.

Apart from local launches, it is also working on becoming the marketing agent for overseas projects by Singapore developers, he said.

"We already do lots of new projects and that will help us."

For instance, ERA has marketed sold-out projects such as The Hillford at Jalan Jurong Kechil and The Inflora at Flora Drive.

Mr Chua said that ERA does not plan to list this year but still expects to list within the next three years.

Singapore-based private equity firm Northstar Group bought ERA last year from Hersing executive chairman Harry Chua.

melissat@sph.com.sg

[Contrarian]

Is Storhub still under ERA?

THe previous owner is now growing TIM HOH WUN dim sum...