Wharf (0004) said it is bearish on the mainland property market and will focus more on Hong Kong after posting a first-half net profit of HK$1.04 billion, compared to a net loss of HK$1.74 billion last year.
Excluding investment property revaluation surplus and other unrealized items, underlying net loss narrowed by 53.53 percent to HK$526 million from a year ago, according to an exchange filing.
An interim dividend of HK$0.2 is declared, the same as last year, compared to a basis earning per share of HK$0.34.
The company will not bid for land in the mainland aggressively given little profit or even loss for the residential projects, said chairman and managing director Stephen Ng Tin-hoi in an online press conference.
The developer reported impairment provisions totaling HK$3,650 million for mainland development properties due to strict price control in the residential sector and oversupply in the nonresidential sector.
Ng said that Beijing has sent a clear signal that homes are for accommodation, not speculation, and is carrying out that policy. Because of this, the developer has not bid for new land for the last two to three years, said Ng, adding that it has no new expansion plans in the mainland.
As for commercial projects, the Hong Kong-based company is also facing stiffer competition from domestic peers, as more mainland companies are switching from the less profitable residential market to the commercial market, said Ng.
Landlords are rushing to offer competitive rental, long rent-free periods or even renovation-free services to attract luxury brands, said Ng, which has led to an increasingly competitive market.
In Hong Kong, local terminal business have been overwhelmed by the extra workload from the mainland after Shenzhen Yantian Port reported confirmed cases over the past two months, said Ng.
This is due down to local ports' lack of land, which makes them unable to take on more work and thus miss out on opportunities, he said, adding that freight volume will fall if ports are rezoned for residential use. This came amid suggestions to relocate Kwai Tsing Container Terminals to create more homes.
In another development, the group announced that Leng Yen-thean has been redesignated from a nonexecutive director to an executive director of the company.
Leng, aged 49, has been an executive director of Wharf Real Estate Investment (1997) since 2017, and is primarily responsible for managing its investment properties in Hong Kong and Singapore.
The new executive director will take up the additional responsibility of managing the group's investment properties in mainland China.
Revealing the results are, from left, director and group financial controller Kevin Hui, Stephen Ng and investor relations manager Angela Ng. SING TAO
