Hang Lung Properties profit dips to $2.3b

Business | Joyce Chen 31 Jul 2018

Hang Lung Properties (0101) reported a 24 percent drop in its underlying net profit to HK$2.32 billion for six months ended June 30, mainly due to declining property sales.

An interim dividend of 17 HK cents was declared.

Revenue from property sales slumped 59 percent to HK$1.03 billion while property leasing in the mainland climbed 11 percent, 9 percent of which could be attributed to the appreciation of yuan over the period, according to chief executive Weber Lo Wai-pak, who just resumed his duties 16 days ago.

Leasing property revenues in Hong Kong rose 3 percent to HK$1.95 billion.

In assessing the mainland's prospects for future growth, Hang Lung said it remained hopeful despite the US-China trade war, and was looking specifically at store openings and relocations in premium shopping facilities, according to a filing to the stock exchange of Hong Kong.

"Our second office tower in Wuxi was topped out recently and this will give us momentum for our expanding office leasing portfolio as demand for premium office leasing in China intensifies," chairman Ronnie Chan said.

Meanwhile, its latest land plot in Hangzhou is expected to be developed into shopping malls and office towers by 2025, said executive director Adriel Chan, who is the chairman's son.

When asked about the shortage of land in Hong Kong, Ronnie Chan said he is talking with Chief Executive Carrie Lam Cheng Yuet-ngor about the issue, and said reclamation at appropriate locations was necessary to solve the problem.

The developer still has a few saleable properties in Hong Kong, including a unit of the Long Beach in Tai Kok Tsui and 12 houses along Blue Pool Road.

These inventories are worth over HK$4 billion, Lo unveiled in a media meeting yesterday.

He added that Hang Lung is closely monitoring the government's move on vacancy tax, and would not give up on Hong Kong's property market despite it having accumulated a substantial land bank in the mainland.

Lo is also confident in the mainland retail market, unveiling that some brands he talked to felt the same, but he refused to name these brands.

Hang Lung Group (0010), the parent of Hang Lung Properties, also released its interim result.

The group's underlying net profit declined by 19 percent to HK $1.46 billion for the six months ended June 30, 2018.

Earning per share amounted to HK$2.23, and an interim dividend of 19 HK cents was proposed.

Last month, Hang Lung issued its first architecture-related green panda bond in the mainland.

"The move laid down a solid financial position for Hang Hung, enabling it to take full advantage of appropriate opportunities in the capital market," it said in the filing.

The parent holds 56.82 percent of the subsidiary as of June 30 this year.

Share prices of both companies advanced yesterday amid falling benchmark index.

Hang Lung Group added 0.46 percent to HK$22.05 while Hang Lung Properties ended at HK$16.58, up 0.85 percent from last Friday.

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