CK Property H1 net jumps 22%
Updated: 2015-08-26 11:28
By Bloomberg in Hong Kong(HK Edition)
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Cheung Kong Property Holdings Ltd - the developer spun off billionaire Li Ka-shing's conglomerate - said first-half profit jumped 22 percent as property sales in Hong Kong were stable and the mainland eased residential curbs.
Net income in the six months to June 30, 2015 was HK$6.9 billion, or HK$1.79 a share, from HK$5.6 billion, or HK$1.46 a share, a year earlier, a statement from the Hong Kong Stock Exchange said on Tuesday. Profit before investment property revaluation rose to HK$5.5 billion from HK$5.1 billion.
CK Property said it expects results in the second half to improve "barring no unforeseen circumstances". The mainland's devaluation of the renminbi to spur slowing economic growth has triggered a worldwide equity sell-off and mainland stocks erased this year's gains as investors shrugged off government attempts to prop up the market.
"Looking ahead, the overall market conditions in Hong Kong and on the mainland will remain stable in the second half year barring no major unforeseen material adverse developments," Li said in the statement. "Housing policies will continue to be a major factor in determining the direction of the long-term development of the property market."
Barclays Plc analysts led by Paul Louie see a potential 27-percent drop in Hong Kong property prices if the residential market pulls back to 2012 levels in line with office rents and retail sales, which have already fallen to those levels.
CK Property shares rose 2.7 percent - the biggest gain in about six weeks - to close at HK$52.2 in Hong Kong before the earnings release. The shares have slumped 30 percent since it began trading on June 3 after Li combined the property assets of Cheung Kong Group and Hutchison Whampoa Ltd.
Earnings from property sales fell 18 percent to HK$3.8 billion, as contributions from Hong Kong declined and were not offset by a pickup on the mainland, where the central government cut interest rates and wound back some real-estate curbs. Total revenue rose 24 percent to HK$19 billion. "With a land bank sufficient for development over the next four to five years, we are well-positioned to boost overall growth," Li said.
The developer has the highest contracted sales among Hong Kong peers this year, after almost selling four projects, including the 1,648-unit the Hemera, co-developed with Nan Fung Group and MTR Corp, according to an Aug 17 report from BNP Paribas SA. It recorded HK$21 billion of sales in the January-July period, according to BNP. CK Property set a 2015 sales target at HK$30 billion.
Prices of existing homes have risen 9 percent this year in Hong Kong, according to Centaline Property Agency Ltd.
More than 60 percent of CK Property's net assets are in Hong Kong, including Li's flagship Cheung Kong Center, and 32 percent are on the mainland, according to JP Morgan Chase & Co. The developer may keep selling some held-for-rent properties in the near term, with an estimated value of HK$8 billion, according to Goldman Sachs Group Inc analysts led by Justin Kwok and Anthony Wu. Rentals account for 26 percent of the developer's net asset value, the analysts wrote in an Aug 17 report.
The company is seeking to sell Century Link in Shanghai, a commercial complex in the city's financial business district, according to a July report by a Shanghai newspaper.
CK Property said it would pay an interim dividend of 35 Hong Kong cents per share.
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A view of Cheung Kong Center in Central. Cheung Kong Property Holdings Ltd has the highest contracted sales among Hong Kong peers this year, after almost selling four projects, according to a recent report from BNP Paribas SA. Roy Liu / China Daily |
(HK Edition 08/26/2015 page9)