Gudou Holdings announces 2017 Annual Results

Revenue surged approximately 72.1% year-on-year to approximately RMB318.5 million

Achieved profit turnaround and recorded net profit of approximately RMB52.4 million

HONG KONG, March 26, 2018 /PRNewswire/ -- Gudou Holdings Limited ("Gudou Holdings", which together with its subsidiaries, is referred to as the "Group", SEHK stock code: 8308), a hot spring resort and hotel operator and tourism property developer in the People's Republic of China (the "PRC"), announces its consolidated annual results for the year ended 31 December 2017 (the "Year").

For the year ended 31 December 2017, the Group recorded a revenue of approximately RMB318.5 million, representing an increase of approximately 72.1% compared to that in 2016. The increase in revenue was primarily attributable to the increase in revenue generated from both of the Group's tourism property development and hot spring resort and hotel operations. The Group's gross profit for the Year amounted to RMB119.5 million, representing an increase by approximately 85.8% compared with last year. Gross profit margin rose from approximately 34.8% for the year ended 31 December 2016 to approximately 37.5% for the Year, which reflected the increase in gross profit margin for hot spring resort and hotel operations and the larger portion of revenue generated from tourism property development which had a higher gross profit margin than that of hot spring resorts and hotel operations. During the Year, the Group's net profit was approximately RMB52.4 million (2016: net loss of approximately RMB46.6 million). The board of directors of the Company does not recommend payment of any final dividend for the year ended 31 December 2017.

During 2017, the Group's hot spring resort and hotel operations business has demonstrated encouraging growth. It's revenue increased by approximately 14.4% year-on-year to approximately RMB125.5 million, which reflected the Group's established business strategy to enhance the "Gudou" brand across the PRC. Specifically, revenue generated from admission fees and catering increased by approximately 21.7% year-on-year. The Group entered into four consultancy agreements with third parties regarding provision of consultancy services in relation to strategic planning in the early stage of project development to various leisure hotels and resorts in Guangdong Province, Sichuan Province and Qinghai Province respectively and such consultancy services contributed revenue of approximately RMB13.5 million to the Group. On the other hand, the Group's room revenue generated from its themed hotel complexes decreased by approximately 15.2% year-on-year. Notwithstanding that the total occupied room nights increased by approximately 7.3%, the occupancy rate of the themed hotel complexes decreased to approximately 39.4% for the Year from approximately 47.9% in 2016. It is believed that the decrease in occupancy rate was mainly due to the opening of Joyful Hotel in early 2017 which led to an increase in total available room nights.

In addition, as the property development industry in Jiangmen City showed signs of recovery, the Group's revenue from the tourism property development business surged 156.2% to approximately RMB193.0 million in 2017 compared with last year. Such significant increase was mainly attributable to the increase in GFA delivered for tourism properties due to the sale and delivery of Joyful Apartments in 2017; and sale and delivery of Mountain Seaview Vacation Residence in the fourth quarter of 2017. As at 31 December 2017, approximately 100%, 98.6% and 98.5% of the total saleable GFA of Mountain Seaview Vacation Apartments, Joyful Apartments and Mountain Seaview Vacation Residence respectively were sold and delivered. Since most of the properties of Mountain Seaview Vacation Residence have been delivered in the fourth quarter of 2017, the Group's revenue and profits (if any) will likely drop significantly in the first quarter of 2018 as compared to the fourth quarter of 2017. Nevertheless, the Group is pleased to announce that Heart of Spring Apartments passed all the necessary development inspection and acceptance and was granted pre-sale permit in December 2017. The Company planned to further sell the properties in 2018. Progress of these tourism property development projects was in line with the Company's plans and directions.

Mr. HON Chi Ming, Chairman, Chief Executive Officer and Executive Director of the Group, said, "Looking ahead in 2018, Gudou will substantiate its growth and create long-term Shareholder's value by focusing primarily on the PRC hot spring and hotel market and expanding the Group's tourism property development business. Tourism property development will remain our focus in 2018 where we expect major pre-sale of Heart of Spring Apartments to continue in the first half of 2018. Those properties are scheduled to be delivered in the fourth quarter of 2018, which will bring a positive effect on the full year results of the Group for 2018."

"Besides, the Hong Kong-Zhuhai-Macau Bridge is expected to be commissioned in the second or third quarter of 2018, which will shorten the travel distance and time between Hong Kong and Gudou Hot Spring Resort. We believe the improving transportation network and infrastructure will make Gudou Hot Spring Resort more accessible and bring in more guests across the PRC in near future."

About Gudou Holdings Limited

Gudou Holdings is a hot spring resort and hotel operator and a tourism property developer in the PRC. It is principally engaged in the operation and management of the hot spring resort and hotel facilities of Gudou Hot Spring Resort, and the development and sale of tourism properties located at Gudou Hot Spring Resort. The "Gudou" brand is a well-known brand of integrated hot spring resort in the PRC. It provides five themed hotel complexes, together with a variety of leisure and recreational attractions, including hot spring facilities, hotels, commercial stores, food and beverage outlets, a recreational waterpark, a spa centre, a conference centre, parks, tourist attractions and other ancillary leisure and recreational facilities.

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