GTEC: Inner Mongolia Growing Twice as Fast as China at 28% GDP
GTEC Stock Guru Profile Golden Horse
Golden Horse is building residences in Inner Mongolia. Hohhot is no longer a sleepy town, it IS one of the mainland China’s fastest-growing economies. Golden Horse is growing with it.
According to the city government’s economic report, Hohhot’s GDP registered year-on-year 28 per cent growth in 2005 and was expected to grow a further 28 per cent last year. That’s almost double the GDP growth of China as a nation and that tells a huge part of Hohhot’s story. It is in a booming growth mode. Inner Mongolia is now home to 16 famous Chinese brands, and seven of these brands earn revenues amounting to 10 billion yuan a year.
While the level of private home ownership in other cities greatly increased over the past 10 years, Hohhot’s housing reform only began two years ago. House prices in Hohhot, the regional capital, with 3.5 million people, showed the biggest annual gain of any Chinese city, at 14.9 per cent.
The average income of urban residents rose from its ranking in 2002 from 29th to 12th. This tremendous advancement in income means urban citizens are searching for modern housing – precisely the product delivered by Golden Horse.
As the government made an effort to reduce poverty by attracting foreign investment in coal mining and property, more people could afford to upgrade their homes after the economy improved and Golden Horse is providing those upgraded residences the citizens demand.
Michael Zhang, DTZ Debenham Tie Leung’s associate director in Beijing, expects residential prices to continue to expand in Inner Mongolia. “Many private entrepreneurs in Inner Mongolia got their first bucket of gold from selling cashmere to the world,” Mr Zhang said. “Most of these rich people prefer to buy property in the capital as they can enjoy better infrastructure such as schools, hospital and better quality housing.”
Three years ago, the government made an aggressive push to attract capital at home and aboard to build modern housing, five-star hotels, and exhibition centers in Hohhot.
Since then, the city has entered a construction boom with 3.79 million square meters of property projects under development last year, up 134 per cent from 2005. Committed capital investment on property rose 54 per cent to 5.8 billion yuan from 2005.
I think being in the housing market in China makes incredibly good business sense and there is no lull to this housing boom … completely unlike what is going on in the United States.
Look at these RESIDENTIAL projects Golden Horse has on the table. These total more than $135 million in revenues and $25 million in estimated profits.
Nan Yuan Estates, 1100 units, $20.5 million contract, $4.1 million projected profits.
Yuan Estates, 600 units, $8.3 million contract, $1.55 million projected profits.
Gold Horse Gardens, 5,000 units, $109.7 million contract, $19.4 million projected profits.
These three projects of residential housing will be completed from 2007 to 2010, and represent over 6,500 residential units.
AND REMEMBER THIS DOES NOT INCLUDE THEIR COMMERCIAL PROJECTS.
Western China is THE NEW Economic Engine of China and Golden Horse is in the center of the great Western China BUILDING BOOM.
Source: Shanghai Times and Golden Horse
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