IFM Investments Limited (CTC) Q1 2012 Earnings Call May 17, 2012 8:00 am ET Executives Donald Zhang – Co-founder, Chairman & Chief Executive Officer Harry Lu – Co-founder, Vice Chairman & President Kevin Cheng Wei – Chief Financial Officer Presentation Operator
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For those of you unable to listen to the entire call at this time, a recording will be available via webcast until May 24 on our corporate website at www.century21cn.com/english.At this point, I’d like to turn the call over to Mr. Donald Zhang. Donald Zhang Thank you. Good day to everyone and thank you for joining us on this call. We are encouraged to see that the signs of the modest market recovery that we saw in the Q4 of 2011 have continued into the first quarter. While policy restrictions (inaudible) remain in place. We see clear indications that underlying demand remains strong and that go better and now two things we re-enter market. Those signs have been particularly evident in the secondary market. January and February were relatively quite as expected, however, we saw our rebounding transaction volumes in March, following the Chinese New Year in Shanghai, for example, we saw more than 16,000 CENTURY transactions in March, which is more than in any other single month since January of 2011. It is important to note here that there were no policy changes, driving these activities during the quarter. In fact, we believe that buyers increase the fuel that the prices have bought and see this at this time to lead the actual market. At the end of the March, the central government made very clear that it tends to keep it’s [confident] restriction in place, in the medium term, while (inaudible) in the market sentiment a little. The impact of transaction volumes was not as near as the part of government announcement. Our initial data for April indicates, that the volumes declines somewhat in fact as still at relatively healthy levels, which project that the lack of the positive signals for the central government is trending less of inactive impact on buyer sentiment than before.
By contracts, the primary sector remains somewhat volatile, developers who are not cash [headwind] can hold arm to inventory partner and therefore more reluctant to this conference stock they have. We saw relatively low transaction volumes, across the primary marketing in the first quarter, probably because buyers the better values in this current market all because it translate the developers to more further discount.Through the rest of year, we expect that government will continue to try to achieve the market relatively subdue by sending signals from time-to-time about the commitment to policy restrictions. As well, we do expect that this management will keep some buyers of the market. We are relatively confident that the volumes should stabilize at reasonable levels, especially in the secondary market. Overall, we are encouraged by the market trends in the first quarter [then] to carry into the second quarter. The recovery of the secondary market of cost plays to the trend of our core business. At the same time, the strategy of the revenue diversification that we viewed up through the last year as we showed that we are now well accelerated against the worse of the market volatility. Looking forward, we are convinced that we have the strategy in the network and the team in place to take the advantage as the market continues to stabilize. I would like now to turn the call over to Harry, who will take you through our first quarter performance in more details and display our strategy for the coming quarters. Thank you. Harry Lu Thank you, Donald. And as Donald mentioned, there were signs in the first quarter that overall transaction volume are recovering, and our encouraging financial performance reflects this. Revenue in the first quarter was RMB130.5 million, which was above the high-end of our guidance. Although, this [returned] a decrease of 5% year-over-year, it’s important to remember that we achieve this with an average of 340 store across our primary home focused network. It is compared to an average of 600 wholesale in-stores in the network in the same quarter last year. I will talk more later about the steps, we’ve been taking to improve network productivities, as Donald said secondary transaction volume return to much happier level in quarter one. Read the rest of this transcript for free on seekingalpha.com