Hang Lung Properties profit rises 3pc to $3.9b

Themis Qi

Hang Lung Properties (0101) posted a net profit of HK$3.97 billion last year, up by 3 percent yearly, and will concentrate on developing land in the mainland in this expected challenging year.

It maintained the final dividend of HK$0.6 apiece, adding up to the total dividend of HK$0.78 per share.

The underlying net profit, after excluding the property revaluation gain, dipped 1 percent year-on-year to HK$4.14 billion last year, for which the developer blamed the rising net interest expenses.

The total revenue inched down by 0.3 percent yearly to HK$10.3 billion, with the lack of property sales last year.

The rental revenue from the mainland also grew only 3 percent to HK$6.97 billion, partly hurt by the depreciation of the Chinese yuan, while that from Hong Kong crawled up by 2 percent to HK$3.3 billion.

No property sales revenue was recognized in 2023, but the developer expects to book the sales of its residential project, The Aperture, in the first half of 2024.

Fueled by the property unit, the parent Hang Lung Group (0010) recorded a net profit of HK$2.81 billion in 2023, 3 percent higher than a year ago.

Hang Lung remains cautiously optimistic about the property industry this year and will continue disposing non-core investment properties to obtain funds.

In Hong Kong, the landlord thinks it will take time to reach a full recovery, and its rental market will continue to be challenging.

But Weber Lo Wai-pak, the chief executive of Hang Lung Properties, believes the high-end luxury properties in the SAR are defensive investments.

Facing slowing consumption growth in China, Hang Lung will shift its focus from luxury sales to boost footfalls at its shopping malls, in addition to customer management, said Lo.

This year will be the busiest year as the company aims to launch several mainland projects that are in the pipeline, added Lo.

Though the property crisis persists, Hang Lung's chairman Ronnie Chan Chi-chung thinks China's property sector might have hit rock bottom. He believes the country's economy will rebound and people should not be too pessimistic.

However, he added that now is not the time to expand investments.

Chan suggested Hongkongers buy homes in the Nansha District of Guangzhou if they cannot afford a unit in Hong Kong. He believes home prices and population will rise in the coming five years. But Hang Lung will not tap into the Greater Bay Area market, as it is not in line with the developer's strategy.