Chinese Estates reviews a year of declines

Business | Samantha Wong 23 Feb 2018

Net profit for Chinese Estates Holdings (0127) was down 42 percent from HK$6.69 billion in 2016 to HK$3.8 billion last year.

Earnings per share tumbled to HK$1.94 from the previous HK$3.33.

A final dividend of 10 HK cents per share was declared compared to 1 HK cent a year earlier.

During the year Chinese Estates acquired about 858 million shares of China Evergrande Group (3333) for approximately HK$13.2 billion.

By the end of 2017 the value of those shares was HK$23.1 billion - a gain of HK$10 billion that was not reflected on the balance sheet for 2017.

Chinese Estates also said it recognized potential fluctuations in the Hong Kong stock market, so "when the share price of China Evergrande Group reaches a satisfactory and attractive level the group may consider offloading part of the investment."

It also said it may consider a recommendation of dividend payments "when appropriate upon realization of investments" in China Evergande.

As for a 60-percent plunge in revenue, that was said to be "mainly due to the decrease in sales of trading properties and gross rental income."

Revenue for the year amounted to HK$1.15 billion, with property sales decreasing from HK$2.94 billion in 2016 to HK$990 million and gross rental income declining from HK$842 million to HK$506 million.

The company noted that the disposal of Lowu Commercial Plaza in Shenzhen, Evergo Tower in Shanghai and Windsor House in Hong Kong led to the decrease in rental income.

Shares of Chinese Estates Holdings fell 4.8 percent to HK$12.76 yesterday. China Evergrande Group lost 4 percent to HK$23.85.

Samantha Wong

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