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» IFM Investments' CEO Discusses Q1 2011 Results - Earnings Conference Call
IFM Investments Limited does not undertake any obligation to publicly update any forward-looking, whether as a result of new information, future events or otherwise, except as required by applicable law.For those of you unable to listen to the entire call at this time, a recording will be available via webcast until August 23rd on our corporate website at www.century21cn.com/english. At this point, I would like to turn the call over to Mr. Donald Zhang. Donald Zhang Thank you. Good day to everyone and thanks for joining us for today’s call. We are very pleased to report a strong performance in the second quarter. Market conditions improved significantly and we return to profitability on the back of very strong sequential revenue growth of 53.5%. As you know, since last year we have been focusing or optimizing our sales network, while diversifying our revenue base to protect us from market fluctuation. Our encouraging results for the quarter illustrate how this strategy is working and is allowing us to capitalize our clear and sustain market recovery. Across all of the major markets transaction volumes in the second quarter rose to higher level than we have seen for the last several quarters. There have been no significant changes to policy in the past quarter. The secondary market has been particularly strong, which is obviously good news for CENTURY 21 China. Overall, we believe that buyer’s confidence is increasing and there is strong potential for continued growth across the secondary and the primary markets. However, we did see a slight decline in the primary sales in July and into August, as developers become less aggressive in providing discounts. The latest figures for August show a similar pattern in the secondary market, but we did not -- we do not think this is reflective for long-term trend.
While the market is undoubtedly in the much better place, I do want to make the point, that [perfections] are still a long way away from what we consider to be normal levels for top tier cities like Beijing and Shanghai.For example, consider that in Beijing and Shanghai volumes in the second quarter were only around half the levels compares to the historical facts. In the near-term at least we don’t anticipate that the policy restrictions will be losing. We are also hopeful that there will not be any new restrictions as per current regulations are already very comprehensive and are being strictly enforced. We therefore don’t see an urge need for any significant change in the near-term, but we are confident that our current strategy gives us the flexibility to manage any potential impact. Looking ahead we expect to see healthy transaction volumes over the coming -- over coming months, and we believe that we have the right structure in place to take full advantages of improved market conditions and we’ll manage our business to ensure the maximum productivity. With that, I will turn the call over to Harry. Harry Lu Thank you, Donald. We record a strong set of results in second quarter as market events recovered strongly. Revenue in the quarter grew 53.5% sequentially to RMB200.3 million, which was well above the high end of our guidance. In particular, we were pleased to return to profitability in this quarter with positive free cash flow. Our strategy for the latest several quarters has been to maintain a leading presence in key neighborhoods, while diversifying revenue streams. This has allowed us not only to maximize business performance during the market toughest periods, but also to take advantage of uptick in activities seen in Q2. One key factor driving our good performance this quarter was our successful network optimizing -- optimization programs, which has ensured that we have a strong cost effective presence in key neighborhood.
In total this quarter, revenues from our company-owned brokerage services account for 86.6% of total revenues. We had total of 327 stores in operation this quarter in our company-owned store network, that’s around the same level we had in Q1.Read the rest of this transcript for free on seekingalpha.com