Staff reporter

New World Development (0017) chief executive Adrian Cheng Chi-kong expects transactions in the local property market will jump by 40 to 50 percent although prices may not see a significant rise after the government scrapped all property cooling measures and eased mortgage lending restrictions on Wednesday.

There has always been a strong demand in the local market, and supportive policies will help release the purchasing power and attract those who are buying properties for investments, which is conducive to the Hong Kong economy, he said.

Cheng said the local developer will not raise funds from shareholders in the current fiscal year, following a similar pledge last year, adding it will consider share buybacks to increase returns for shareholders.

He said NWD will speed up new project launches in the city to offer a total of 2,500 units in the next six months. The firm will also accelerate the disposal of non-core assets - increasing the selling target to HK$8 billion.

Meanwhile, the group had 15 million square feet of agricultural land in the Northern Metropolis, most of which are in good locations, Cheng said.

Apart from partnering with Chinese state-owned developer China Resources Land (1109) to build a residential project in the Northern Metropolis, Cheng said the company is also finalizing cooperation with other state-backed firms at a large site in the area, which will be announced soon.

NWD reported a 12.8 percent drop in net profit to HK$502 million for the six months ending in December and cut the interim dividend by 57 percent to 20 HK cents.

For the six months ended December, 2023, its revenue from continuing operations - which excludes charges related to the sale of NWS (0659) - fell 25 percent to HK$17.07 billion during year-on-year amid a weaker property market in Hong Kong and mainland.

However, NWD's gross profit was up 2 percent to HK$7.3 billion, attributed to higher margins from property investment in its K11 portfolio.

Profits from its core businesses among continuing operations also rose 12 percent to HK$4.87 billion from a year earlier. Specifically, revenues from property investment in Hong Kong grew 17 percent to HK$1.75 billion while that in the mainland rose 4 percent to HK$929 million.

The company said it held HK$52 billion worth of capital resources, including cash and bank balances of HK$39 billion and undrawn facilities from banks of HK$13 billion.

As of December, NWD's net debt-to-equity ratio was 49.9 percent - an increase of 2.2 percentage points compared to the restated ratio in June last year.

Adrian Cheng says supportive policies will help unlock spending power. Sing Tao

NWD jumps on sales bandwagon